Supply chain relational capital and the bullwhip effect: An empirical analysis using financial disclosures
Date
2019-08-15
Journal Title
Journal ISSN
Volume Title
Publisher
Emerald Group Publishing Limited
Abstract
Purpose: The primary objective of this study is to conduct a large-sample empirical investigation of how relational capital impacts bullwhip at the supplier. Design/methodology/approach: The study uses mandatory disclosures in regulatory filings of US firms to identify a supplier’s major customers and constructs empirical proxies of supply chain relational capital i.e., length of the relationship between suppliers and customers, and partner interdependence. Multivariate regression analyses are performed to examine the effects of relational capital on bullwhip at the supplier. Findings: The findings show that bullwhip at the supplier is greater when customers are more dependent on their suppliers, but is reduced when suppliers share longer relationships with their customers. The results also provide additional insights on several firm characteristics that impact supplier bullwhip, including shocks in order backlog, selling intensity, and variations in profit margins. Further, we document that the effect of supply chain relationships on bullwhip tends to vary across industries and over time. Originality/value: The study employs a novel dataset that is constructed using firms’ financial disclosures. This large panel dataset consisting of 13,993 observations over 36 years enables thorough and robust analyses to characterize supply chain relationships and gain a deeper understanding of their impact on bullwhip.
Description
Keywords
Bullwhip effect, Relational capital, supply chain, regression analysis, financial statements
Citation
Zhao, R., Mashruwala, R., Pandit, S., & Balakrishnan, J. (2018). Supply chain relational capital and the bullwhip effect: An empirical analysis using financial disclosures. International Journal of Operations and Production Management. 1-59.