How Do Political and Business Ties Matter for Supply Chain Management Capability? An Empirical Test of an Integrative Framework

Abstract

Supply chain management capability has become increasingly important in highly dynamic and uncertain situations, such as the COVID-19 pandemic. However, our systematic literature review indicates that little is known about how different types of ties influence the intention of firms to adopt B2B platforms and improve international performance. This study aims to explore the important role of political and business ties in the development of supply chain management capability by arguing that political and business ties are positively related to the development of supply chain management capability, which is proposed to shape the intention of firms to adopt B2B platforms and their international performance. Furthermore, we also attempt to develop a framework between potential strategic needs for a firm’s supply chain capability development and different ties. Using survey data collected from a sample of 369 firms in China, we test these proposed arguments empirically through structural equation modeling (SEM) analysis. Results demonstrate that political and business ties contribute positively to developing a firm’s supply chain capability, positively related to the firm’s intention to adopt B2B platforms and international performance. In addition, our study also reveals that supply chain risk significantly modifies the relationships between political or business ties and supply chain capability development. This study provides important contributions to the literature by extending prior research on supply chain management and offers important insights into our understanding of the successful development of supply chain management capability, intention to adopt B2B platforms, and international performance improvement. We believe our findings can help inform how firms can develop supply chain management capability by utilizing different ties.