Firm-Level Analysis of Global Supply Chain Network: Role of Centrality on Firm’s Performance

Abstract

Over the past few years, academics and practitioners have started paying more attention to analyze and understand value creation and business models from a business ecosystem perspective. Such business ecosystems have been constructed based on the connected networks of people, firms, industries, and countries. Developing strategies to help sustain the firms’ competitive advantage in business ecosystems is a key challenge for businesses and policymakers worldwide. Recent disruptions to global supply chains due to the COVID-19 pandemic have exposed the high risk and challenges of managing sustainable global and intertwined supply chain networks. Using the data mined from financial records, the present study constructs the global supply chain network of the auto manufacturing sector. The data from 32,396 notable first-tier forward and backward supply chain connections were mined to build the global supply chain network in this sector. The global supply chain network structure was analyzed using centrality measures and clustering analysis. We utilized path analysis to explore the effect of various supply chain centrality measures on firms' financial performance, investment risk, and market value volatility. The findings provide new insight into our understanding of the relationship between the firm's location characteristics in the global supply chain ecosystem and various aspects of the asset's performance. Furthermore, discussions are presented about strategies that support sustainable collaborative value creation and sustainable competitiveness of businesses across the global manufacturing ecosystems. The research method used in this study has the potential to be applied to several industries.Supplementary InformationThe online version contains supplementary material available at 10.1007/s42943-021-00026-8.