Termination of supply chain strategic collaboration and market value: evidence from Chinese listed companies

Abstract

Supply chain strategic collaboration (SCSC) is an important means for enterprises to cultivate competitive advantage in the supply chain, but this will also be accompanied by risks. This paper focuses on the impact of the termination of SCSC on market value. We select samples from Chinese listed companies to test the stock market reaction to the announcement of the collaboration termination. The results show that the mean (median) cumulative market reaction is −1.97% (−0.68%) on the announcement day and the day after the announcement, significantly different from 0 at the level of 1% (5%). We also find that the shorter the duration of collaboration, the more negative the market reaction. Compared with small companies, the market reaction of the announcement of termination of collaboration issued by large companies is more negative. In addition, the market reaction to the announcement in which the partner is non-listed is also more negative.