Business

The profitability implications of supplier concentration during economic recession and restoration: the moderating role of supply localization

J. Liang and S. Yang

This research, conducted by Jing Liang and Shilei Yang, uncovers how supplier concentration impacts profitability in companies during economic downturns and recoveries. The findings reveal that supply localization plays a crucial role, enhancing positive outcomes in recessions while dampening them in restorations. Discover why managing supplier relationships is vital in varying economic climates.

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Playback language: English

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Abstract

This paper investigates the impact of supplier concentration on firm profitability during economic recessions and restorations, considering the moderating role of supply localization. Using data from 3319 listed Chinese companies from 2020-2021, the study finds that supplier concentration is positively correlated with profitability during recessions and negatively correlated during restorations. Supply localization amplifies these effects; it strengthens the positive relationship during recessions and the negative relationship during restorations. The findings suggest that firms should strategically manage supplier relationships based on the economic phase.

Publisher

Humanities & Social Sciences Communications

Published On

Sep 27, 2024

Authors

Jing Liang, Shilei Yang

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