Does Supply Chain Network Centrality Enhance or Impede Firm Innovation: Evidence from China

ABSTRACT

This study mainly investigates the effects of supply chain network centrality on firm innovation output. We uncover that supply chain network centrality has a negative impact on firm innovation. The negative impact of network centrality on corporate innovation quantity is stronger when economic policy uncertainty is higher and the firm belongs to high-tech industries. Similarly, the detrimental effect of network centrality on corporate innovation quality is magnified when the level of marketization is lower and the firm belongs to high-tech industries. Firms with high supply chain network centrality are associated with more severe short-sightedness, higher transaction costs, and greater operational risks, and thus inhibits firm innovation output.

KEYWORDS:

• Supply network
• firm innovation
• managerial myopia
• transaction cost

JEL:

• O31
• O32
• G14

Disclosure statement

No potential conflict of interest was reported by the author(s).

Supplementary material

Supplemental data for this article can be accessed online at https://doi.org/10.1080/1540496X.2023.2298269.

Additional information

Funding

This work was supported by the Philosophy and Social Science Program of Colleges and Universities in Jiangsu Province [2021SJA0287].