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Supply chain relational capital and the bullwhip effect

Supply chain relational capital and the bullwhip effect The purpose of this paper is to conduct a large-sample empirical investigation of how relational capital impacts bullwhip at the supplier.Design/methodology/approachThe study uses mandatory disclosures in regulatory filings of US firms to identify a supplier’s major customers and constructs empirical proxies of supply chain relational capital, i.e., length of the relationship between suppliers and customers and partner interdependence. Multivariate regression analyses are performed to examine the effects of relational capital on bullwhip at the supplier.FindingsThe findings show that bullwhip at the supplier is greater when customers are more dependent on their suppliers, but is reduced when suppliers share longer relationships with their customers. The results also provide additional insights on several firm characteristics that impact supplier bullwhip, including shocks in order backlog, selling intensity and variations in profit margins. Furthermore, the authors document that the effect of supply chain relationships on bullwhip tends to vary across industries and over time.Originality/valueThe study employs a novel data set that is constructed using firms’ financial disclosures. This large panel data set consisting of 13,993 observations over 36 years enables thorough and robust analyses to characterize supply chain relationships and gain a deeper understanding of their impact on bullwhip. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Operations & Production Management Emerald Publishing

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0144-3577
DOI
10.1108/ijopm-03-2018-0186
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to conduct a large-sample empirical investigation of how relational capital impacts bullwhip at the supplier.Design/methodology/approachThe study uses mandatory disclosures in regulatory filings of US firms to identify a supplier’s major customers and constructs empirical proxies of supply chain relational capital, i.e., length of the relationship between suppliers and customers and partner interdependence. Multivariate regression analyses are performed to examine the effects of relational capital on bullwhip at the supplier.FindingsThe findings show that bullwhip at the supplier is greater when customers are more dependent on their suppliers, but is reduced when suppliers share longer relationships with their customers. The results also provide additional insights on several firm characteristics that impact supplier bullwhip, including shocks in order backlog, selling intensity and variations in profit margins. Furthermore, the authors document that the effect of supply chain relationships on bullwhip tends to vary across industries and over time.Originality/valueThe study employs a novel data set that is constructed using firms’ financial disclosures. This large panel data set consisting of 13,993 observations over 36 years enables thorough and robust analyses to characterize supply chain relationships and gain a deeper understanding of their impact on bullwhip.

Journal

International Journal of Operations & Production ManagementEmerald Publishing

Published: Aug 7, 2019

Keywords: Bullwhip effect; Relational capital; Supply chain; Regression analysis; Financial statements

References