Supplier-base concentration and efficiency: the moderating roles of R&D expenditure and market share
International Journal of Physical Distribution & Logistics Management
ISSN: 0960-0035
Article publication date: 1 November 2022
Issue publication date: 9 December 2022
Abstract
Purpose
This study addresses an important research question regarding how supplier-base concentration affects buyer efficiency. Drawing on the contradicting views of transaction cost theory (TCT) and resource dependence theory (RDT), the authors explore the main effect of supplier-base concentration on buyer efficiency and how this effect is contingent on buyers' characteristics (i.e. research and development (R&D) expenditure and market share).
Design/methodology/approach
Based on data collected from the Chinese manufacturing firms listed on National Equities Exchange and Quotations (NEEQ) between 2015 and 2019, the authors use a fixed-effect model as well as a two-stage least squares model to test the predictions.
Findings
The authors find that supplier-base concentration has a positive effect on buyer efficiency. In addition, when a buyer has higher levels of R&D expenditure and market share, the positive relationship between supplier-base concentration and buyer efficiency is strengthened.
Originality/value
This study contributes to a better understanding of the effect of supplier-base concentration. First, the authors provide theoretical and empirical evidence of the positive effect of supplier-base concentration on buyer efficiency. Second, the authors reveal the underlying mechanism of how to counter the potential drawbacks and benefit more from supply base reduction by introducing R&D expenditure and market share as contingencies.
Keywords
Acknowledgements
This research was supported by Jiangsu Funding Program for Excellent Postdoctoral Talent [2022ZB601]. The authors thank Meirong Zhou for data collection in the initial version of the manuscript.
Citation
Han, Z., Hu, M., Zuo, Y. and Jiang, S. (2022), "Supplier-base concentration and efficiency: the moderating roles of R&D expenditure and market share", International Journal of Physical Distribution & Logistics Management, Vol. 52 No. 9/10, pp. 748-770. https://doi.org/10.1108/IJPDLM-04-2021-0108
Publisher
:Emerald Publishing Limited
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