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

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

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 role 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-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.

Citation

Wu, L., Wang, M., Kumar, A., & Choi, T.-M. (2024). Mitigating the bullwhip effect through supply chain ESG transparency: roles of digitalization and signal strength. International Journal of Operations and Production Management, https://doi.org/10.1108/ijopm-08-2023-0667

• Journal Article Type: Article
• Acceptance Date: Mar 26, 2024
• Online Publication Date: May 14, 2024
• Publication Date: May 14, 2024
• Deposit Date: May 23, 2024
• Publicly Available Date: May 23, 2024
• Journal: International Journal of Operations and Production Management
• Print ISSN: 0144-3577
• Electronic ISSN: 1758-6593
• Publisher: Emerald
• Peer Reviewed: Peer Reviewed
• DOI: https://doi.org/10.1108/ijopm-08-2023-0667
• Keywords: supply chain transparency; ESG transparency; bullwhip effect; digitalization; signal strength; noise
• Public URL: https://nottingham-repository.worktribe.com/output/35153526
• Publisher URL: https://www.emerald.com/insight/content/doi/10.1108/IJOPM-08-2023-0667/full/html