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Supplier geographical concentration and corporate innovation

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Listed:
  • Xiong, Yurong
  • Wu, Haomin
  • Ding, Xin
  • Wu, Ji (George)

Abstract

Firms should stabilize their supply-chain relationships and rely more on innovation-driven development strategies in the post-pandemic period. This study explores the effect of suppliers’ geographical concentration on corporate innovation. Using data on A-share listed firms in China from 2007 to 2020, we find that suppliers’ geographical concentration significantly and negatively affects corporate innovation. Furthermore, the channel test results show that suppliers’ geographical concentration restrains corporate innovation primarily through their strong bargaining power and by exacerbating the firm's financing constraints.

Suggested Citation

  • Xiong, Yurong & Wu, Haomin & Ding, Xin & Wu, Ji (George), 2023. "Supplier geographical concentration and corporate innovation," Finance Research Letters, Elsevier, vol. 56(C).
    • Handle: RePEc:eee:finlet:v:56:y:2023:i:c:s1544612323004890
    DOI: 10.1016/j.frl.2023.104117
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    References listed on IDEAS

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    Cited by:

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    2. Zheng, Xiaxuan & Chen, Yueyan, 2024. "Does supply-chain-finance help to improve the efficiency of outward foreign direct investment?," Finance Research Letters, Elsevier, vol. 59(C).
    3. Gu, Fei & He, Mingke, 2024. "A study of supply chain relationship change and RFID IT adoption: Evidence from listed companies," Finance Research Letters, Elsevier, vol. 61(C).

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    More about this item

    Keywords

    Supply chain relationship; Geographical concentration; Corporate innovation;
    All these keywords.

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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