Mitigating the bullwhip effect through supply chain ESG transparency: roles of digitalization and signal strength

Lin Wu, Miao Wang, Ajay Kumar, Tsan Ming Choi

    Research output: Journal PublicationArticlepeer-review

    Abstract

    Purpose: The call for supply chain transparency (SCT), especially the environmental, social and governance (ESG) aspect, is getting increasingly louder. Based on the signaling theory, our study investigates the operational benefit of supply chain transparency in terms of ESG (SCT-ESG). To further clarify the signaling process, the moderating roles of digitalization of the firm and signal strength are also examined. Design/methodology/approach: Longitudinal secondary data from multiple databases are matched and analyzed using ordinary least squares (OLS) regressions to validate the proposed hypotheses. Findings: Results suggest that with SCT-ESG, firms have a weakened disparity between production variance and demand variance, and the supply chain experiences a reduced bullwhip effect. Further, digitalization of the focal company and signal strength reinforce the negative effect of SCT-ESG on the bullwhip effect. Originality/value: The study integrates the SCT and ESG literature through SCT-ESG, extending benefits of ESG disclosure to the supply chain context. It extends the application of the signaling theory in OSCM by including contextual factors of digitalization and signal strength.

    Original languageEnglish
    Pages (from-to)1707-1731
    Number of pages25
    JournalInternational Journal of Operations and Production Management
    Volume44
    Issue number9
    DOIs
    Publication statusPublished - 13 Aug 2024

    Keywords

    • Bullwhip effect
    • Digitalization
    • ESG transparency
    • Noise
    • Signal strength
    • Supply chain transparency

    ASJC Scopus subject areas

    • General Decision Sciences
    • Strategy and Management
    • Management of Technology and Innovation

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