Supply-Chain Concentration and Inefficient Investment

Zhiyang Hui

Emerging Markets Finance and Trade, 2023, vol. 59, issue 7, 2129-2144

Abstract: This paper investigates the influen7ce of supply-chain concentration on inefficient investment. We find that concentrated supply chains significantly foster inefficient investment and distort investments in an under-investing way. It suggests that a concentrated supply-chain base detriments investment efficiency. Nevertheless, the adverse impact is mitigated when switching costs are higher, information environment is more transparent, and CEO risk-taking incentives are higher. We also compare the effects in different types of firms and find that SOEs are less vulnerable to supply-chain concentration in terms of underinvestment. Overall, our study sheds light on the economic implications of supply-chain concentration in emerging markets.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/1540496X.2023.2179873 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:59:y:2023:i:7:p:2129-2144

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MREE20

DOI: 10.1080/1540496X.2023.2179873

Access Statistics for this article

More articles in Emerging Markets Finance and Trade from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().