The spillover effects of supply chain corruption practices on stock returns



Wang, Geng ORCID: 0000-0002-1830-7495, Xiong, Yangchun, Cheng, Yang and Lam, Hugo KS ORCID: 0000-0002-4674-6145
(2023) The spillover effects of supply chain corruption practices on stock returns. INTERNATIONAL JOURNAL OF OPERATIONS & PRODUCTION MANAGEMENT, 44 (5). pp. 934-951.

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Abstract

<jats:sec><jats:title content-type="abstract-subheading">Purpose</jats:title><jats:p>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.</jats:p></jats:sec><jats:sec><jats:title content-type="abstract-subheading">Design/methodology/approach</jats:title><jats:p>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.</jats:p></jats:sec><jats:sec><jats:title content-type="abstract-subheading">Findings</jats:title><jats:p>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.</jats:p></jats:sec><jats:sec><jats:title content-type="abstract-subheading">Originality/value</jats:title><jats:p>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.</jats:p></jats:sec>

Item Type: Article
Uncontrolled Keywords: Supply chain corruption, Event study, Stock returns, Spillover effects
Divisions: Faculty of Humanities and Social Sciences > School of Management
Depositing User: Symplectic Admin
Date Deposited: 15 May 2023 09:26
Last Modified: 06 May 2024 03:08
DOI: 10.1108/IJOPM-11-2022-0760
Related URLs:
URI: https://livrepository.liverpool.ac.uk/id/eprint/3170222