Abstract
This paper investigates the relationship between management tone and a firm's decision on supply chain configuration. We find that during the years 2010 through 2020, a more positive management tone is associated with a lower supply chain concentration. We establish causality through the IV-2SLS approach. In addition, we find that this relationship is more pronounced for firms with greater operational risk, higher industry competition, and a weaker market advantage position. Overall, our results highlight that proactive managers are more likely to anticipate future challenges and proactively address supply chain concentration risks in their current decision-making processes.
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