Navigating through geopolitical risk: the role of supply chain concentration

Zhu, Minghao, Miao, Shucheng, Lam, Hugo KS ORCID: 0000-0002-4674-6145, Liang, Chen and Yeung, Andy CL (2025) Navigating through geopolitical risk: the role of supply chain concentration INTERNATIONAL JOURNAL OF OPERATIONS & PRODUCTION MANAGEMENT, 45 (5). pp. 1032-1065. ISSN 0144-3577, 1758-6593

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Abstract

Purpose: This study aims to investigate the impact of geopolitical risk (GPR) on supply chain concentration (SCC) and the roles of operational capabilities and resources in this relationship. Design/methodology/approach: Secondary longitudinal data from multiple sources is collected and combined to test for a direct impact of GPR on SCC. We further examine the moderating effects of firms’ operational capabilities and resources (i.e. firm resilience, operational slack and cash holding). Fixed-effect regression models are applied to test the hypotheses, followed by a series of robustness tests to check the consistency of the results. Findings: Consistent with the tenets of resource dependence theory, our analysis reveals a significant negative impact of GPR on SCC. Moreover, we find that this adverse effect is attenuated for firms with higher levels of resilience, more operational slack and greater cash holdings. Further analysis suggests that maintaining a diversified supply chain base during heightened GPR is associated with a firm’s improved financial performance. Originality/value: This study contributes to the supply chain management (SCM) literature by integrating GPR into the supply chain risk management framework. Additionally, it demonstrates the roles of diversification and operational resources in addressing GPR-induced challenges.

Item Type:	Article
Uncontrolled Keywords:	Geopolitical risk, Supply chain concentration, Operational resources, Resource dependence theory, China
Divisions:	Faculty of Humanities & Social Sciences Faculty of Humanities & Social Sciences > School of Management
Depositing User:	Symplectic Admin
Date Deposited:	22 Oct 2024 07:06
Last Modified:	23 May 2026 09:25
DOI:	10.1108/IJOPM-03-2024-0248
Related Websites:	Author Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3185651
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