The spillover effects of supply chain corruption practices on stock returns

TY - JOUR

T1 - The spillover effects of supply chain corruption practices on stock returns

AU - Wang, Geng

AU - Xiong, Yangchun

AU - Cheng, Yang

AU - Lam, Hugo K.S.

N1 - Funding Information: The authors thank the Guest Editor, Prof. Constantin Blome, an anonymous associate editor and two anonymous reviewers for their insightful comments and useful suggestions, which help improve the quality of this paper. Wang acknowledges the support provided by S.C. Van Fonden (2022-0056). Publisher Copyright: © 2023, Emerald Publishing Limited.

PY - 2023/6/12

Y1 - 2023/6/12

N2 - Purpose: This study aims to explore the spillover effects of supply chain corruption practices (SCCPs) on stock returns along the supply chain and within the industry. Specifically, it investigates how SCCPs affect the stock returns of corrupt firms' bystander supply chain partners and industry peers, both of which are not involved in the SCCPs. Design/methodology/approach: The authors employ the event study methodology to quantify SCCPs' spillover effects in terms of abnormal stock returns. The analysis is based on 117 SCCPs occurring in China between 2014 and 2021. Findings: The event study results show that SCCPs have negative effects on the stock returns of corrupt firms' bystander supply chain partners. Such negative effects are more pronounced for bystander buyers than bystander suppliers. However, SCCPs do not have a significant impact on the stock returns of corrupt firms' industry peers. Additional analysis further suggests that SCCPs are more likely to affect the stock returns of domestic rather than overseas bystander supply chain partners. Originality/value: This study is the first attempt to thoroughly examine the spillover effects of SCCPs along the supply chain and within the industry, advancing the understanding of the financial consequences of SCCPs and providing important implications for future research and practices related to supply chain corruption.

AB - Purpose: This study aims to explore the spillover effects of supply chain corruption practices (SCCPs) on stock returns along the supply chain and within the industry. Specifically, it investigates how SCCPs affect the stock returns of corrupt firms' bystander supply chain partners and industry peers, both of which are not involved in the SCCPs. Design/methodology/approach: The authors employ the event study methodology to quantify SCCPs' spillover effects in terms of abnormal stock returns. The analysis is based on 117 SCCPs occurring in China between 2014 and 2021. Findings: The event study results show that SCCPs have negative effects on the stock returns of corrupt firms' bystander supply chain partners. Such negative effects are more pronounced for bystander buyers than bystander suppliers. However, SCCPs do not have a significant impact on the stock returns of corrupt firms' industry peers. Additional analysis further suggests that SCCPs are more likely to affect the stock returns of domestic rather than overseas bystander supply chain partners. Originality/value: This study is the first attempt to thoroughly examine the spillover effects of SCCPs along the supply chain and within the industry, advancing the understanding of the financial consequences of SCCPs and providing important implications for future research and practices related to supply chain corruption.

KW - Event study

KW - Spillover effects

KW - Stock returns

KW - Supply chain corruption

UR - http://www.scopus.com/inward/record.url?scp=85161158049&partnerID=8YFLogxK

U2 - 10.1108/IJOPM-11-2022-0760

DO - 10.1108/IJOPM-11-2022-0760

M3 - Article

AN - SCOPUS:85161158049

SN - 0144-3577

JO - International Journal of Operations and Production Management

JF - International Journal of Operations and Production Management

ER -