Mitigating the bullwhip effect through supply chain ESG transparency: roles of digitalization and signal strength

Lin Wu, Miao Wang, Ajay Kumar () and Tsan-Ming Choi
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Lin Wu: UON - University of Nottingham, UK
Miao Wang: University of Nottingham Ningbo [China]
Ajay Kumar: EM - EMLyon Business School
Tsan-Ming Choi: University of Liverpool

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Abstract: Purpose: The call for supply chain transparency (SCT), especially the environmental, social and governance (ESG) aspect, is getting increasingly louder. Based on the signaling theory, our study investigates the operational benefit of supply chain transparency in terms of ESG (SCT-ESG). To further clarify the signaling process, the moderating roles of digitalization of the firm and signal strength are also examined. Design/methodology/approach: Longitudinal secondary data from multiple databases are matched and analyzed using ordinary least squares (OLS) regressions to validate the proposed hypotheses. Findings: Results suggest that with SCT-ESG, firms have a weakened disparity between production variance and demand variance, and the supply chain experiences a reduced bullwhip effect. Further, digitalization of the focal company and signal strength reinforce the negative effect of SCT-ESG on the bullwhip effect. Originality/value: The study integrates the SCT and ESG literature through SCT-ESG, extending benefits of ESG disclosure to the supply chain context. It extends the application of the signaling theory in OSCM by including contextual factors of digitalization and signal strength.

Keywords: Signal strength; Digitalization; Bullwhip effect; ESG transparency; Supply chain transparency (search for similar items in EconPapers)
Date: 2024-08-13
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Published in International Journal of Operations and Production Management, 2024, 44 (9), pp.1707 - 1731. ⟨10.1108/IJOPM-08-2023-0667⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05531902

DOI: 10.1108/IJOPM-08-2023-0667

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