We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
The role of social relations in supply chain decision‐making: Evidence from China.
- Authors
Lei, Liu; Wei, Xu; Yongjian, Shen
- Abstract
This study examines the extent to which firms in emerging markets build supply chains around social relationships. Most existing studies contend that companies decide who to buy (sell) products from (to) based on cost–benefit trade considerations of product quality, price, and other factors. We argue that companies make supply chain decisions around social relations to reduce possible risks. We empirically test this conjecture by using data from Chinese municipal party secretaries who served in different places from 2006 to 2017, and the primary customers of listed companies. The results show that after an official move from one jurisdiction to work in another, the firms in the latter jurisdiction will see an increase in customers from where the official previously served. Further investigation reveals that companies that are economically strong, face fierce competition, are state‐owned, and are located in areas with low degrees of marketization are more likely to attract customers from the area where the official last served after the new municipal party secretary takes office. Making supply chain decisions based on the social relationships of the secretaries of the municipal party committees does not improve companies' profitability, but doing so will increase the turnover rate of accounts receivable and accounts received in advance.
- Subjects
CHINA; SUPPLY chains; ACCOUNTS receivable; REVERSE logistics; CONSUMERS; DECISION making; EMERGING markets
- Publication
Journal of International Financial Management & Accounting, 2024, Vol 35, Issue 2, p364
- ISSN
0954-1314
- Publication type
Article
- DOI
10.1111/jifm.12199