Supply network structure and firm tail risk

Rongsheng Zhuo, Zheng Qiao, Ao Li, Bo Sang and Yu Cai

Research in International Business and Finance, 2025, vol. 79, issue C

Abstract: This paper examines how supply network structure affects financial stability, specifically for systemic tail risks in capital markets. We construct supply networks using data from the top five clients and suppliers disclosed in the annual reports of Chinese A-share listed companies from 2009 to 2022, and measures node-level supply network structure. Our findings indicate that improved supply network structure reduces firms’ systemic tail risks, primarily through information efficiency and risk diversification mechanisms. The effect is more pronounced with heightened analyst and media attention, superior corporate disclosures, closer proximity to clients or suppliers, and fewer financial constraints. This study provides insights into building resilient supply chains and mitigating financial risks.

Keywords: Supply network structure; Systematic tail risk; Financial stability; Social network analysis (search for similar items in EconPapers)
JEL-codes: G24 G34 O16 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:79:y:2025:i:c:s0275531925003514

DOI: 10.1016/j.ribaf.2025.103095

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