489 / 2024-04-25 16:21:00

The Supply Chain Risk Transmission and Moderating Effects of Information Technology

IT,supply chain,risk management

In the current complex international environment and de-globalized economic situation, supply chain relationships are no longer stable and supply chain partners have become an important source of systematic risks for enterprises. At the same time, the booming industrial informatization revolution has also had an important impact on risk transmission in supply chains, on the one hand, it has strengthened the production operation and supply chain management efficiency of firms, and on the other hand, it has affected the structure of supply chain networks and the degree of inter-firm linkages. These effects on the risk linkages among firms in the supply chain are different. This study focuses on the impact of two types of risks, both systematic risks and idiosyncratic risks of suppliers, on the systematic risks of downstream firms, as well as the impact of firms' information technology (IT) inputs on the propagation of supply chain risks. Through an empirical research approach, we show that both types of upstream risks enhance firms' systematic risk. Meanwhile, unlike previous optimistic evaluations of IT's impact on risk management, while IT adoption can mitigate the impact of upstream idiosyncratic risks on firms' own systematic risks, but at the same time it can deepen the systematic risks linkages between upstream and downstream firms. These findings can help firms apply information technology to control risks in a better way.