Can industry-specific information disclosure regulation mitigate the bullwhip effect in supply chain? Evidence from Chinese listed companies

Jing Zheng and Mengqi Zou

International Review of Financial Analysis, 2025, vol. 103, issue C

Abstract: The widespread supply chain bullwhip effect significantly amplifies supply–demand fluctuations, adversely impacting business operations. Employing a quasi-natural experiment of industry-specific information disclosure regulation (IIDR) in China, we explore the impact of a new capital market IIDR model on the bullwhip effect and its mechanisms. The study demonstrates that IIDR can significantly mitigate the supply chain bullwhip effect, with robustness tests supporting this conclusion. Mechanism analysis reveals that this effect is primarily achieved by reducing environmental uncertainty, improving accounting information quality, and enhancing corporate governance. Further analysis indicates that IIDR can enhance suppliers' provision of commercial credit to companies, increase suppliers' stability, and improve supply chain finance. Heterogeneity analysis reveals significant variation in mitigation effects attributable to factors of information-processing costs, opportunism risk, systemic risk, and proprietary information costs. Specifically, the mitigation effect is enhanced during periods of high systemic risk and companies facing significant information-processing costs, whereas it is weakened for companies that have a dominant position in the supply chain, possess stronger management capabilities, and those facing higher proprietary information costs. This study demonstrates the significant influence of IIDR on mitigating the supply chain bullwhip effect, providing empirical evidence regarding how subsequent IIDR policies can be adjusted to address supply chain risks.

Keywords: Industry-specific information disclosure regulation; Supply chain; The bullwhip effect; Information asymmetry; Environmental uncertainty; Corporate governance (search for similar items in EconPapers)
JEL-codes: G14 G34 G38 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:103:y:2025:i:c:s105752192500331x

DOI: 10.1016/j.irfa.2025.104244

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