IDEAS home Printed from https://ideas.repec.org/a/pal/risman/v27y2025i2d10.1057_s41283-025-00161-z.html
   My bibliography  Save this article

Supply chain concentration and corporate OFDI risk-taking

Author

Listed:
  • Peng Cheng

    (Sichuan International Studies University
    Sichuan International Studies University)

  • Dai Xuansi

    (Sichuan International Studies University)

  • Fan Tingli

    (Sichuan International Studies University)

  • Chen Yuansheng

    (Sichuan International Studies University)

Abstract

In the context of the increasingly volatile, uncertain, complex, and ambiguous international market environment, it is imperative to address the pressing issue of how to enhance multinational enterprises’ risk-taking in outward foreign direct investment (OFDI). Drawing on data from listed Chinese companies from 2012 to 2022 and relying on MOA theory, this study conducts an analysis of the influence of supplier and customer concentration on corporate risk-taking in OFDI from the perspectives of motivation and ability. Empirical results reveal that higher supplier concentration inhibits corporate OFDI risk-taking, while higher customer concentration enhances. Mechanism testing found that supplier concentration mainly reduces OFDI risk-taking by increasing the absorption of redundancy, while customer concentration will increase business complexity and reduce absorbed redundancy. Additionally, executive compensation incentives and financing constraints moderate these effects, with executive compensation showing a U-shaped moderating effect and financing constraints having a negative moderating effect. Further analysis indicates the heterogeneous impact of economic institutional distance and environmental uncertainty on the concentration of suppliers (customers) on corporate risk-taking. Our research findings contribute to the integration of MOA theory into the field of multinational enterprises’ OFDI, enriching the relevant theories on supply chain management and corporate OFDI, and providing important decision-making references for multinational corporations and governments.

Suggested Citation

  • Peng Cheng & Dai Xuansi & Fan Tingli & Chen Yuansheng, 2025. "Supply chain concentration and corporate OFDI risk-taking," Risk Management, Palgrave Macmillan, vol. 27(2), pages 1-37, May.
    • Handle: RePEc:pal:risman:v:27:y:2025:i:2:d:10.1057_s41283-025-00161-z
    DOI: 10.1057/s41283-025-00161-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41283-025-00161-z
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1057/s41283-025-00161-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:risman:v:27:y:2025:i:2:d:10.1057_s41283-025-00161-z. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.