Supply chain concentration and financial performance: the moderating roles of marketing and operational capabilities

Abstract

Purpose

Based on resource dependence theory (RDT) and transaction cost theory (TCT), we aim to investigate the relationship between supply chain concentration and firm performance. Based on the resource-based perspective, we further investigate the moderating effect of marketing and operational capabilities on the relationship between supply chain concentration and firm performance.

Design/methodology/approach

Based on data from 2,082 firms with 8,371 observations from 2008 to 2020 in China, we use stochastic frontier analysis to calculate marketing capability and operational capability and use multinational regressions to test our research model.

Findings

We find a U-shaped relationship between supplier concentration and firm performance; there is also a U-shaped relationship between customer concentration and firm performance. In addition, the relationship between supplier concentration and firm financial performance is strengthened by the firm’s marketing capability, and the relationship between customer concentration and firm financial performance is weakened by the firm’s operational capability.

Originality/value

Drawing from RDT and TCT, this study extends the research on the impact of supply chain concentration on firm performance. The study finds that supply chain concentration and firm performance have a nonlinear relationship, and it is further moderated by marketing capability and operational capability, providing insights for managers.

Citation

Wei, S., Deng, C., Liu, H. and Chen, X. (2024), "Supply chain concentration and financial performance: the moderating roles of marketing and operational capabilities", Journal of Enterprise Information Management, Vol. 37 No. 4, pp. 1161-1184. https://doi.org/10.1108/JEIM-07-2023-0356