Managing firm risk through supply chain dependence: an SME perspective

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Feng Liu ◽  
Kwangtae Park
Keyword(s):  
Supply Chain ◽  
Credit Risk ◽  
Credit Rating ◽  
Emerging Market ◽  
Firm Risk ◽  
Content Type ◽  
Industrial Marketing ◽  
Customer Dependence ◽  
Using Data ◽  
The Impact

Purpose The purpose of this study is to conduct an empirical investigation into the impact of supply chain dependence (including customer dependence and supplier dependence) on credit risk through the lens of social network theory (SNT) by focusing on how to manage firm risk using supply chain relationships in the context of Chinese small and medium-sized enterprises (SMEs). Design/methodology/approach Using data from public databases, this study selects a unique sample from a Chinese SME board and uses an ordered logistic regression model to investigate the relationship between the dependence on major customers or suppliers and both credit risk and credit rating. It is found that the results are robust to the use of different empirical methods. Findings The main findings of this study are that a firm’s dependence on major customers is positively related to its credit risk but negatively related to its credit rating, while a firm’s dependence on major suppliers is positively related to its credit risk but negatively related to its credit rating. Originality/value To broaden the understanding of industrial marketing and purchasing, this study contributes to research on supply chain relationship management and risk management by focusing on SMEs’ dependence on major customers and suppliers and empirically examining the influence of this dependence on both credit risk and credit rating in an emerging market.

Supply chain collaboration in performance-based contracting: an empirical study

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hasan Uvet ◽  
Hasan Celik ◽  
Sedat Cevikparmak ◽  
Saban Adana
Keyword(s):  
Supply Chain ◽  
Structural Equation ◽  
Convincing Evidence ◽  
The Body ◽  
Amazon Mechanical Turk ◽  
Equation Modeling ◽  
Supply Chain Collaboration ◽  
Content Type ◽  
Using Data ◽  
The Impact

PurposeDespite the significant increase in the adoption of performance-based contracting (PBC) in various industries, the primary value drivers of it are still not clear. Considering a lack of empirical evidence for PBC, this study investigates the effects of collaboration between the suppliers to understand the value offerings created in PBC by empirical findings. The purpose of this paper is to examine how supply chain collaboration (SCC) affects PBC benefits.Design/methodology/approachUsing data from 381 survey participants who hold the title of manager or above, hypotheses are tested using structural equation modeling (SEM).FindingsThe results reveal that a strong and positive relationship between SCC and PBC benefits.Research limitations/implicationsOne of the limitations of this research is the collection of data through the Amazon Mechanical Turk online service. The experience level of participants in PBC and the absence of validation of these scale items by industrial experts are other limitations of this study. Nonetheless, the authors found convincing evidence that SCC has a positive effect on PBC benefits.Practical implicationsThe findings highlight the importance of SCC to increase financial, operational and non-financial benefits of PBC for practitioners. The findings offer guidance for managers aiming to increase PBC benefits through SCC.Originality/valueThis is the first study to empirically examine the impact of SCC for better PBC and contributes to the body of knowledge by providing empirical findings in a PBC context. This research also develops valid and reliable instruments to measure PBC benefits through rigorous empirical and statistical analysis that can be used in future studies.

The impact of market sectors and rating agencies on credit ratings: global evidence

2019 ◽  
Vol 20 (5) ◽  
pp. 389-410
Author(s):  
Kerstin Lopatta ◽  
Magdalena Tchikov ◽  
Finn Marten Körner
Keyword(s):  
Credit Risk ◽  
Credit Rating ◽  
Credit Ratings ◽  
Content Type ◽  
Rating Agencies ◽  
Credit Rating Agency ◽  
Rating Agency ◽  
Investment Grade ◽  
The Impact ◽  
Rating Downgrades

Purpose A credit rating, as a single indicator on one consistent scale, is designed as an objective and comparable measure within a credit rating agency (CRA). While research focuses mainly on the comparability of ratings between agencies, this paper additionally questions empirically how CRAs meet their promise of providing a consistent assessment of credit risk for issuers within and between market segments of the same agency. Design/methodology/approach Exhaustive and robust regression analyses are run to assess the impact of market sectors and rating agencies on credit ratings. The examinations consider the rating level, as well as rating downgrades as a further measure of empirical credit risk. Data stems from a large global sample of Bloomberg ratings from 11 market sectors for the period 2010-2018. Findings The analyses show differing effects of sectors and agencies on issuer ratings and downgrade probabilities. Empirical results on credit ratings and rating downgrades can then be attributed to investment grade and non-investment grade ratings. Originality/value The paper contributes to current finance research and practice by examining the credit rating differences between sectors and agencies and providing assistance to investors and other stakeholders, as well as researchers, how issuers’ sector and rating agency affiliations act as relative metrics.

Strategic orientations, sustainable supply chain initiatives, and reverse logistics

2016 ◽  
Vol 36 (1) ◽  
pp. 86-110 ◽  
Author(s):  
Chin-Chun Hsu ◽  
Keah-Choon Tan ◽  
Suhaiza Hanim Mohamad Zailani
Keyword(s):  
Supply Chain ◽  
Reverse Logistics ◽  
Emerging Market ◽  
Equation Modeling ◽  
Sustainable Supply Chain ◽  
Ongoing Research ◽  
Content Type ◽  
Strategic Orientations ◽  
The Impact

Purpose – Global outsourcing shifts manufacturing jobs to emerging countries, which provides new opportunities for improving their economic development. The authors develop and test a theoretical model to predict first, how sustainable supply chain initiatives might influence reverse logistics outcomes and second, the impact of eco-reputation and eco-innovation orientation strategies on the deployment of sustainable supply chain initiatives. The paper aims to discuss these issues. Design/methodology/approach – The proposed new model of antecedents and outcomes of sustainable supply chain initiatives underwent a rigorous empirical test through structural equation modeling with samples from an emerging market. Findings – The results show that firms that implement sustainable supply chain initiatives can realize positive reverse logistics outcomes; the study also provides new insights into eco-innovation and eco-reputation strategic orientations as theoretically important antecedents of sustainable supply chain initiatives. Research limitations/implications – Though the authors identify three components of sustainable supply chain initiatives, other components could exist, and ongoing research should investigate them. Practical implications – The findings have important implications for managers in emerging markets seeking to initiate ecologically friendly business practices. The authors offer strong evidence of the benefits obtained from reverse logistics in sustainable supply chain initiatives. Policy makers and firms attempting to nurture sustainable supply chain initiatives should not overlook the important role of eco-reputation and eco-innovation strategic orientations, which the results identify as important enablers. Originality/value – This study offers evidence of the critical role of eco-reputation and eco-innovation strategic orientations in deploying sustainable supply chain initiative programs, as well as of their mutual effects. This study also offers empirical evidence that implementing sustainable supply chain initiatives leads to reverse logistics, creating value, and a new source of competitive advantages.

scholarly journals Managerial ability, earnings quality and ISIS: evidence from Iraq

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ameneh Bazrafshan ◽  
Naser Makarem ◽  
Reza Hesarzadeh ◽  
Wafaa SalmanAbbood
Keyword(s):  
Stock Exchange ◽  
Emerging Market ◽  
Earnings Quality ◽  
Islamic State ◽  
Managerial Ability ◽  
Content Type ◽  
Earnings Response Coefficient ◽  
Earnings Response ◽  
Using Data ◽  
The Impact

PurposeThis study investigates the association between managerial ability and earnings quality in firms listed on the Iraq Stock Exchange and how the emergence of the Islamic State of Iraq and Syria (ISIS) influences the association.Design/methodology/approachThis study uses a sample of firms listed on the Iraq Stock Exchange over the period 2012–2018. Managerial ability is quantified using data envelopment analysis, and earnings quality is measured by earnings restatement, earnings persistence, accruals quality and earnings response coefficient. Panel regression analysis is used to examine the research hypotheses.FindingsThe findings indicate that managerial ability positively affects earnings quality of Iraqi firms and that ISIS weakens the relationship between managerial ability and earnings quality. These findings are robust to the alternative measures of managerial ability, as well as to various approaches used to address endogeneity including propensity-score matching and a difference-in-differences analysis.Originality/valueThis study provides insight into the impact of managerial ability on earnings quality in an under-studied emerging market. Furthermore, this study broadens the existing literature about the financial consequences of a modern terrorist group, ISIS.

Mediated power and sustainable supplier management (SSM)

2019 ◽  
Vol 49 (8) ◽  
pp. 861-878
Author(s):  
Yinfei Chen ◽  
Injazz J. Chen
Keyword(s):  
Supply Chain ◽  
Structural Equation ◽  
Emerging Market ◽  
Supplier Management ◽  
Equation Modeling ◽  
Coercive Power ◽  
Content Type ◽  
Sustainable Performance ◽  
Justice Perception ◽  
The Impact

Purpose As focal buyers implement sustainable supplier management (SSM) to advance their supply chain sustainability, the purpose of this paper is to provide a more nuanced understanding of how buyers’ use of power may incite varying perceptions of justice from suppliers that affect sustainable supplier performance (SSP). Design/methodology/approach This paper draws on multidisciplinary literature and collects empirical data from 181 supplying firms in China to examine the complex links among power use, justice, SSM, and sustainable performance using partial least squares structural equation modeling. Findings Both coercive and reward buyer power can facilitate SSM implementation and justice perception moderates the impact of SSM on SSP. Furthermore, coercive power adversely influences justice evaluation, thereby attenuating the effect of SSM on performance. Research limitations/implications This study complements and extends sustainable supply chain management research by evaluating SSM: on environmental, social and economic performance; from the perspectives of suppliers; and in an emerging market where many suppliers of Western firms are located. It also adds to behavioral SCM research by examining how buyers’ exercise of power might influence suppliers’ justice perception. Practical implications To implement SSM, focal buyers cannot simply issue codes of conduct to suppliers and ignore suppliers’ disposition to commit to standards. While coercive power might be convenient and tempting for buying firms, managers ought to be judicious in the use of coercion. Originality/value This is the first large-scale empirical investigation on the links among power use, justice, SSM and sustainable performance from the perspectives of suppliers in an emerging economy.

Survival in a new industry: marijuana, venture structure and outcomes

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Karen Nicholas ◽  
Curtis R. Sproul ◽  
Kevin Cox
Keyword(s):  
Supply Chain ◽  
Holistic Approach ◽  
Firm Survival ◽  
New Firms ◽  
Content Type ◽  
Firm Structure ◽  
Two Factors ◽  
Using Data ◽  
The Impact ◽  
New Industry

Purpose The purpose of this study is to explore how new firms enter a new industry and which structure will support survival. Essentially, the study examines the extent to which new firms choose to be broad with regard to the industry supply chain and deep with regard to their market presence. Based on these two structural decisions, each one is examined independently and in conjunction to discover which aspects support survival. Design/methodology/approach A quantitative approach was adopted, consisting of using data supplied by the state of Colorado. More specifically, the study draws on empirical data that identifies which license type (grower, manufacturer and retailer) each firm chose to get and how many retail outlets the firm chose to operate. Findings The findings reveal that firms that cover the breadth of the supply chain are twice as likely to survive, while a broad market presence increases the risk of exit by 2.5 times. When the two factors were combined, it was firms with broad integration and deep market presence that had the highest chance of survival, as opposed to firms with intuition. A deep market presence seemed to accentuate the effect of integration, increasing the risk when the firm was not integrated, while increasing the survival rate when the firm was integrated. Research limitations/implications This industry is quite new and afforded a unique opportunity to examine the impact of firm structure on survival. However, it may not be generalizable to other industries. Practical implications The present analysis argues that firms must adopt a holistic approach to their firm structure, because there are combinatorial effects at play. That is, while one specific strategy may increase survival, other strategies may impact firm survival. Examining and understanding the interplay of firm decisions are critical for firm survival. Originality/value Because of the lack of the formation of new industries, the authors’ understanding of the impact of firm structure on survival is limited. This unique context afforded the opportunity to empirically examine how firms can increase their chance of survival based on two aspects of firm structure: the breadth of the supply chain and the depth of the firm’s market presence.

Impact of supply chain management practices on firm performance

2017 ◽  
Vol 45 (4) ◽  
pp. 366-384 ◽  
Author(s):  
Aradhana Vikas Gandhi ◽  
Ateeque Shaikh ◽  
Pratima Amol Sheorey
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Theoretical Model ◽  
Firm Performance ◽  
Management Practices ◽  
Emerging Market ◽  
Relationship Management ◽  
Chain Management ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to investigate the adoption and implementation of supply chain management practices (SCMPs) on supply chain performance (SCP) and firm performance (FP) in the organized retail industry in a developing country like India. Design/methodology/approach An empirical study was conducted on a sample size of 125 responses collected from the supply chain heads of organized retail firms in India. A theoretical model was developed depicting the relationship between SCMPs, SCP and FP. The theoretical model was tested using mediating multiple regression analysis. Findings This research suggests that the SCMPs are positively related to SCP and FP. Customer relationship management and supplier relationship management are reported as the most important SCMPs, which had the maximum impact on the FP in the organized retailing context in India. Research limitations/implications The research employed perceptual performance measures. Future studies can use actual performance parameters like profit and sales growth to better quantify the benefits of SCM in this context. Originality/value This research is an attempt to empirically test the impact of SCMPs on FP in organized retailing context in an emerging market, India.

Do asset sales affect firm credit risk? – Evidence from credit rating assignments

2014 ◽  
Vol 40 (9) ◽  
pp. 903-927 ◽  
Author(s):  
Vinod Venkiteshwaran
Keyword(s):  
Credit Risk ◽  
Credit Rating ◽  
Credit Ratings ◽  
Ordered Probit ◽  
Asset Sales ◽  
Content Type ◽  
Credit Quality ◽  
The One ◽  
Opposing Effects ◽  
The Impact

Purpose – Asset sales can have opposing effects on firm credit quality. On the one hand asset sales could signal increased credit risk resulting from distress or on the other hand they could improve internal liquidity and hence credit quality. Therefore the impact potential asset sales can have on credit quality is an empirical question and one that has previously not been examined in the literature. The paper aims to discuss these issues. Design/methodology/approach – Using credit ratings as a measure of firm credit quality, in ordered probit regressions, this study finds evidence consistent with the internal liquidity view of the asset sales-credit risk relationship. Findings – Results from ordered probit regressions of credit ratings show that the likelihood of higher credit ratings is increasing in industry-level turnover of real assets Originality/value – Credit-rating agencies often cite the impact of asset sales on firm credit quality as a motivation for their rating assignments. Distress-driven asset sales could reduce firm credit quality whereas other asset sales could result in increased internal firm liquidity and hence improve firm credit quality. This bi-directional expectation leaves the question of how asset sales affect credit quality to be answered empirically and has not been previously tested in the literature.

scholarly journals Embracing supply chain agility: an investigation in the electronics industry

2016 ◽  
Vol 21 (1) ◽  
pp. 140-156 ◽  
Author(s):  
Ying Kei Tse ◽  
Minhao Zhang ◽  
Pervaiz Akhtar ◽  
Jill MacBryde
Keyword(s):  
Supply Chain ◽  
Firm Performance ◽  
Emerging Market ◽  
Mediation Effect ◽  
Future Research ◽  
Content Type ◽  
Supply Chain Agility ◽  
External Learning ◽  
The Impact ◽  
The Relationship

Purpose – This paper aims to identify the antecedents of firm’s supply chain agility (SC agility) and how SC agility impacts on firm’s performance. Design/methodology/approach – Based on a comprehensive literature review, a conceptual model was proposed, in which the interrelated hypotheses were tested by structural equation modelling methodology using a dataset collected from 266 Chinese electronics firms. Findings – Initially, it was found that SC integration and external learning positively influenced SC agility. Second, the results indicated that firm’s performance is positively impacted by SC agility. Moreover, SC agility also fully mediated the effect of SC integration on firm’s performance and the effect of external learning on firm’s performance. Research limitations/implications – The generalizability of this research sample might be the major limitation of this study. Therefore, future research can adopt other industry sectors samples, such as automobile manufacturing, or other country samples to validate the research model. Practical implications – This research outlines strategies for better preparedness to achieve SCs to be agile which is a core competency of electronic firms in emerging market. Findings reveal that the external coordination practices – external learning and SC integration – are important factors of SC agility. In addition, the findings contribute to understanding the important role of SC agility in improving firm’s performance. Originality/value – This research examines the impact of two antecedents (i.e. SC integration and external learning) on SC agility and is the first empirical research to analyze the mediation effect of SC agility on the relationship between SC integration and firm performance and the relationship between external learning and firm performance.

Effect of supply chain strategic collaboration announcements on shareholder value: an empirical investigation from China

2020 ◽  
Vol 40 (4) ◽  
pp. 389-414
Author(s):  
Weihua Liu ◽  
Wanying Wei ◽  
Cheng Si ◽  
Dong Xie ◽  
Lujie Chen
Keyword(s):  
Supply Chain ◽  
Market Reaction ◽  
Emerging Market ◽  
Shareholder Value ◽  
Abnormal Returns ◽  
Signaling Theory ◽  
Market Model ◽  
Content Type ◽  
Control Power ◽  
The Impact

PurposeThis study empirically examines the impact of announcements on supply chain strategic collaboration (SCSC) on companies' shareholder value.Design/methodology/approachThis study analyzes changes in shareholder value of companies listed in China based on data of 208 SCSC announcements. The signaling theory is applied to determine correlation among SCSC announcements and the market. An event study is used to estimate the stock market reaction to SCSC announcements. The common market model estimates stock abnormal returns after the event. The least squares method and regression model calculate the model parameter value.FindingsThere is a positive and statistically significant relationship between SCSC announcement and shareholder value. Market reaction to product development collaboration is significantly higher than to technology-sharing collaboration, market collaboration, and other SCSC types. The market reacts more positively to suppliers and companies with greater supply chain control power than to buyers and companies with lower control power. Announcements from the service supply chain can lead to stronger market reactions than those from manufacturing supply chains.Practical implicationsThe findings provide a systematic assessment of how SCSC announcements contribute to firms' shareholder value. The result provides a benchmark of value promotion that can be expected from SCSC announcements.Originality/valueThis study fills the research gap that using secondary data to assess changes in companies’ shareholder value caused by SCSC announcements and firstly examines these changes by constructing the signaler–signal–receiver progress based on signaling theory. The research results provide a new reference and inspiration for deeper understanding of the impact mechanism of SCSC. Furthermore, this study contributes to the development of the signaling theory using an empirical study in an emerging market, China.

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