The impact of social capital on major customer supply chain power

G M Wali Ullah, Tony Cavoli, Isma Khan and Mohammad Abdullah

Economics Letters, 2024, vol. 238, issue C

Abstract: We investigate the impact of regional social capital on firms' ability to attain bargaining power over their supply chain partners. Using ordinary least squares and instrumental variables estimations, we find a positive relationship between firm-level supply chain power and US county-level social capital. Additionally, we observe this positive effect to be stronger for firms in durable goods manufacturing and the services industry, but not for nondurable goods manufacturers. We conclude that firms headquartered in US counties with high social capital are preferred by suppliers, resulting in greater supply chain power.

Keywords: Customer-supplier relationship; Social capital; Supply Chain Power; Major customers (search for similar items in EconPapers)
JEL-codes: C36 C38 G30 G41 M14 O31 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:238:y:2024:i:c:s0165176524002088

DOI: 10.1016/j.econlet.2024.111725

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