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Article

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

by
Mengmeng Wang
1 and
Shufeng (Simon) Xiao
2,*
1
College of Business, Gachon University, Seongnam 13120, Republic of Korea
2
Division of Business Administration, Sookmyung Women’s University, Seoul 04310, Republic of Korea
*
Author to whom correspondence should be addressed.
Sustainability 2023, 15(1), 208; https://doi.org/10.3390/su15010208
Submission received: 4 December 2022 / Revised: 13 December 2022 / Accepted: 20 December 2022 / Published: 23 December 2022
(This article belongs to the Special Issue Studies of Supply Chain Resilience and Manufacturing Enterprise Management from a Circular Economy Perspective)
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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.

1. Introduction

The sudden COVID-19 pandemic disrupted the global supply chain, and the production chain and international logistics were once in a state of tension. The economic and trade disputes between China and the U.S. have gone all-round, global trade protectionism has risen, and some countries have strengthened the protection of their enterprises and markets. The uncertainty brought by supply chain risks has become more serious, forcing firms to reflect on how to obtain resources in an open, dynamic, and complex environment to gain the initiative in global supply chain restructuring. Given the fragmented and fast-changing nature of resources, individual firms have difficulty obtaining the necessary resources for development. Thus, adopting political and business tie strategies is the way for firms to survive and seek growth [1,2,3]. Political ties refer to a firm’s major shareholders or executives who have maintained close ties with government departments for government officials [4]. Firms invest a lot of effort in cultivating and developing relationships with government agencies, industry authorities, regulators, and state-owned banks [5,6]. Political ties can bring firms privileged information about industry regulations and policies, enabling them to align with government rules, norms, and expectations and protecting them from unfair treatment [6]. Good and strong political ties can help firms gain more institutional support and thus reduce the uncertainty caused by politics [7]. Business ties are the relationships with customers, suppliers, distributors, and peers [3] that firms invest a lot of effort in nurturing and developing, which can serve as a resource supply and information acquisition [8,9]. Frequent communication between firms and partners can lead to an improved understanding of customer preferences and enable firms to meet market demands more efficiently [10]. Collaboration with competitors can help firms grasp competitive market dynamics and shorten product development cycles [11], positively regulating the relationship between relational norms and collaborative performance [12]. Firms gain many benefits from utilizing political and business ties and connections. However, current management and academic research have not yet provided a clear understanding of the relationships among supply chain risk, political ties, business ties, and supply chain management capabilities, representing a notable research shortcoming in supply chain management.
With the increasing international economic cooperation, the economic ties between countries widely penetrate the fields of production collaboration, technology and information exchange, capital financing, and labor cooperation. The finished products received by consumers may come from different countries regarding product design, raw materials, production, and assembly of components. When facing the fluctuation of market demand, amplifying one kind of demand variation in the supply chain is easy. Thus, the “bullwhip effect” appears, seriously affecting the value output of the whole supply chain. In this case, adopting e-commerce platforms can help overcome the information asymmetries that limit firms’ ability to compete in the marketplace during traditional transactions, as well as the border restrictions and social distance that accelerate the digitization of online sales and procurement during the pandemic. As predicted by DHL Express in a report on “The Ultimate B2B E-commerce Guide: Tradition is out. Digital is in,” the B2B (business-to-business) e-commerce market will see strong growth in the coming years, and by 2025, 80% of sales interactions between suppliers and buyers in the global B2B space will take place in digital channels.
By 2027, the global B2B e-commerce transaction volume is expected to be US $20.9 trillion, and the global B2B e-commerce market is expected to usher in big business opportunities. As supply chain competition becomes more intense, business users are more concerned about seizing the opportunities brought by B2B e-commerce platforms by improving their supply chain management capabilities to enhance their international performance. Despite the excellent efforts by researchers in reviewing and synthesizing the supply chain management literature, they have generally neglected to examine the implications of supply chain capabilities.
The role of supply chain capability development is believed to be more salient in emerging economies such as China because the supply chain environment contexts are fundamentally and comprehensively dynamic in these economies. Supply chain capability development may play a more important role in significantly shaping the intention to adopt B2B e-commerce and the international performance of firms. Thus, omitting the effect of supply chain capabilities on the intention to adopt B2B e-commerce and international performance in examining supply chain management has seriously limited our understanding of supply chain capability development, representing another serious shorting in the supply chain management literature.
In this study, we aim to address the following four important research questions.
(1)
Do political and business ties influence the supply chain capability development of firms based in emerging economies?
(2)
How do supply chain risks moderate the relationships between political and business ties and supply chain capability development?
(3)
What are the effects of firms’ supply chain capability development on their intention to adopt B2B e-commerce and international performance?
(4)
How can firms’ intention to adopt B2B e-commerce influence their international performance?
More specifically, we attempt to correct the shortcomings in the supply chain management literature by theorizing and empirically examining whether political and business ties can effectively support firms in developing their supply chain capabilities. In addition, given that the international market is currently in a critical period of supply chain restructuring, to help enterprises reduce supply chain risks in the global supply chain restructuring process, we also attempt to incorporate supply chain risks into our conceptual framework. We understand the role of supply chain risk in moderating the relationships between political and business ties in addition to the supply chain capabilities to provide useful guidelines for firms’ supply chain management decisions to better avoid supply chain risk.
Finally, firms will inevitably be affected by the global supply chain when expanding internationally. Firms have been increasingly attempting to improve their supply chain management capabilities to secure international performance to gain a competitive advantage in the global supply chain. Therefore, we further aim to explore the effects of supply chain capability development of firms on their intention to adopt B2B e-commerce and international performance and systematically understands the effects of supply chain management capabilities in driving firms’ intention to adopt B2B e-commerce and benefiting them by providing them with effective solutions to enhance their international performance. We tested these relationships by empirically using comprehensive survey data on 369 firms from China.
With this comprehensive research, we offer several important contributions to the supply chain capability development and supply chain risk management literature. First, we contribute theoretically to the literature on supply chain management by integrating political and business ties in exploring the factors that influence a firm’s supply chain capability development and their relationships with the firm’s intention to adopt B2B e-commerce and international performance. Our study represents one of the first attempts to theorize and incorporate political and business ties into supply chain capability development and management literature. Second, our study complements the supply chain risk management literature that explores how supply chain risks may influence the respective contributions of political ties and business ties to developing supply chain management capability.
Our results suggest that political and business ties are more likely to contribute positively to developing supply chain management capability under higher supply chain risks. Our findings offer important boundary conditions when exploring the influence of political or business ties on supply chain management capability. Lastly and perhaps more importantly, we offer an additional contribution to a more recent and related theoretical development that focuses on understanding how firms’ supply chain management capability may contribute to explaining the variation of the firms’ intention to adopt B2B e-commerce and international performance outcomes.

2. Theoretical Background and Hypotheses Development

Resource dependency theory suggests that resources vary significantly among firms, and no firm can be self-sufficient and interact with other organizations to obtain the necessary resources for survival [13,14,15]. Thus, the scarcity and importance of the resources on which a firm depends determine the degree of dependence on the external environment. In particular, when faced with the uncertainty of the external environment, firms need to reduce their dependence on external organizations for key resource supply, for example, by changing their own structure and seek a way to influence these external organizations that can provide critical resources so key resources can be maintained in a stable manner [14]. Given that firms cannot meet demand independently, they take interlocks, alliances, joint ventures, in-sourcing arrangements, mergers and acquisitions, and other multiple measures to obtain external resources [16]. Building upon resource-dependence theory, this study proposes a conceptual model, especially depicted in Figure 1.
As shown in Figure 1, we explore the effects of political and business ties on supply chain capability development by proposing that political and business ties play an important role in positively influencing a firm’s supply chain capability development. Furthermore, we also expect that supply chain risk plays a critical role in moderating the effects of political and business ties on the firm’s supply chain capability development, respectively. Moreover, we look at how a firm’s supply chain capability development may explain the variations in firms’ intention to adopt B2B e-commerce and their international performance. We also examine how the intention to adopt B2B e-commerce may contribute to international performance.
Political ties refer to the fact that the major shareholders or executives of a firm have experience working as government officials and thus maintain close ties with governmental departments [17]; it also refers to the fact that firms invest considerable effort in cultivating and developing relationships with government agencies, industry authorities, regulatory authorities, and state-owned banks to use their political connections to obtain resources such as government subsidies, tax breaks, or R&D funding [4,5,6]. Firms with political ties have information benefits, channel benefits, referral benefits, and legitimacy effects [18]. While several prior studies have attempted to explore how political ties or connections may contribute to firm innovation capability or performance, these efforts did not produce consistent results [2,3,19,20,21]. Prior research suggests political ties provide a link between related sectors, through which firms can actively influence government decisions and provide access to key scarce resources controlled by the government [22,23], and firms can use their political ties to obtain a timely and accurate policy, technology, and market information [18,24]. The supply chain management capability of firms mainly includes information exchange capability, coordination and operation capability, activity integration capability, and responsiveness. Compared with competitors, firms can exchange information more freely and with better quality with firms participating in the supply chain, coordinate and operate with corresponding firms within the supply chain with better efficiency and lower cost, and anticipate demand and plan for the future better with corresponding firms within the supply chain, making them respond faster and more effectively to changing customer and supplier demands [25]. Political ties are beneficial for firms to exchange information in a targeted manner, adjust the goals and directions of supply chain collaboration, and improve their responsiveness to market and customer needs. In summary, firms’ acquisition of political ties can promote supply chain management capabilities. This logic leads to the following hypothesis.
Hypothesis 1 (H1).
Political ties are positively associated with supply chain management capability, such that firms with political ties have stronger supply chain management capabilities than firms without political ties.
In a highly competitive market environment, it is difficult for individual firms to grasp market information on their own fully. By developing good relationships with other firms, such as suppliers, customers, and competitors, managers can help obtain their business partners’ rich market and product information [3,17]. Building ties with competitors can motivate firms to improve products and services, shorten product development cycles, and help both parties to establish strategic alliances and reduce the possibility of unhealthy competition [3]. Developing ties with suppliers can ensure the supply channels of firms and make their supply chain activities smoother. Building a good relationship with customers can help companies improve customer loyalty and help them better acquire and understand customer needs. By developing a good relationship with customers, firms can become more customer demand-oriented, which makes them more targeted and effective in developing new products [2]. Business ties can help firms integrate supplier and customer resources, share information with suppliers and customers, allow suppliers and customers to provide information, and involve suppliers and customers in the company’s product development process, positively impacting supply chain integration [26]. Given that supply chain integration is considered an important dimension of supply chain management capability, business ties are expected to positively contribute to the supply chain management capability. The logic provides the following hypothesis.
Hypothesis 2 (H2).
Business tiles are positively associated with supply chain management capability, such that firms with business ties have stronger supply chain management capabilities than those without business ties.
Given that firms in the supply chain network are interdependent, any one firm’s problems may affect the whole supply chain [27,28]. For example, the failure of upstream firms to supply in time will lead to the production and sales of downstream firms being adversely affected; therefore, supply chain risks cannot be ignored [29,30]. In general, the external risks of a firm’s supply chain mainly come from political, social, environmental, and economic risks and suppliers and customers [31]. Given that each firm is an independently operated and managed economic entity, when the supply chain becomes increasingly large and complex, the chances of information errors in the supply chain increase, and the risk of information transmission in the supply chain is thus likely to rise. In particular, when a country’s economic policy changes, creating the need to adjust the industrial structure, the country will introduce a series of policies and measures to adjust the industrial structure, greatly impacting the fundraising, investment and mergers and acquisitions, and other business management activities of firms in the supply chain. Under this condition, firms’ political and business ties can effectively promote information sharing among supply chain enterprises [32,33]. Although each firm may encounter different supply chain risks, the greater the supply chain risks are, the more eager firms are to use their political and business ties to obtain timely and accurate information to strengthen their supply chain management capabilities. In summary, supply chain risk will positively mediate the relationships between political and business ties and supply chain management capabilities. Therefore, we propose the following hypotheses.
Hypothesis 3a (H3a).
Supply chain risk moderates the positive relationship between political ties and supply chain management capability, such that the stronger the supply chain risk, the greater the effect of political ties on improving the firm’s supply chain management capability.
Hypothesis 3b (H3b).
Supply chain risk moderates the positive relationship between business ties and supply chain management capability, such that the stronger the supply chain risk, the greater the effect of a firm’s business ties on improving the firm’s supply chain management capability.
A close relationship is observed between electronic marketplaces and supply chain management, and different types of electronic marketplaces are required for different buyer–seller relationships [34]. Electronic marketplaces can help firms buy, sell, and manage supply chain processes more effectively globally. Through electronic marketplaces, firms can collaborate effectively, forecast demand, and share strategic information across companies. If firms want to participate in electronic marketplaces fully, they must initially integrate internal and external supply chain activities [35]. In other words, firms can effectively use electronic marketplaces only if they have fully improved their supply chain management capabilities. B2B is an important inter-firm form of e-commerce in which firms link upstream brands’ sales operations and downstream retailers’ purchasing operations through internal information system platforms and external websites to generate a series of inter-enterprise transactions, including products and services, and resources [36,37]. Given that B2B is an electronic marketplace between firms, firms are expected to be more willing to use B2B platforms for their own use if they can adequately improve their supply chain management capabilities. The logic provides the following hypothesis.
Hypothesis 4 (H4).
Supply chain management capability is positively associated with adopting B2B platforms, such that firms with a higher level of supply chain management capabilities have a stronger intention to adopt B2B platforms.
Under the same capital, technology, equipment, and environmental conditions, a higher supply chain management capability will lead to higher operational efficiency. Supply chain management capability refers to the performance of strategic supplier partnerships, information sharing level, information sharing quality, customer service management, internal lean practices, and overall quality management. A strong supply chain management capability significantly affects supply chain performance and manufacturing firms’ performance [38]). Moreover, improving supply chain management capability also positively affects the firm’s environmental performance [39]. Given the importance of supply chain management capability in improving firm performance, supply chain management capability possibly influences the international performance of firms. Thus, we propose the following hypothesis.
Hypothesis 5 (H5).
A supply chain management capability is positively associated with international performance, such that firms with a higher level of supply chain management capabilities have higher international performance.
B2B e-commerce has changed the traditional business transaction model by enabling sellers and buyers to trade directly on the platform. Firms using B2B platforms can create value through the network effect, allowing a good match between supply and demand. Firms that adopt B2B e-commerce for trading have higher market transparency and transaction efficiency, gain a competitive advantage over their peers and positively impact their financial performance [40]. At the same time, adopting B2B platforms by firms can also increase trust and transaction frequency and reduce transaction costs between firms, which can help improve the relationship performance between buyers and sellers, supplier performance and market performance [41]. Given the many benefits of adopting B2B platforms in improving firm performance, the adoption of B2B platforms improves firms’ international performance. The logic leads to the following hypothesis.
Hypothesis 6 (H6).
The intention to adopt B2B platforms is positively associated with international performance, such that firms with a stronger intention to adopt B2B e-commerce have higher international performance.

3. Methodology

3.1. Sampling and Data Collection

To test our hypotheses, we utilized the data collected from a sample of firms in China using a survey approach. We carefully developed the survey instrument by first developing an English questionnaire and then translating it into Chinese with the assistance of two independent professional translators who are competent in English and Chinese. Finally, we back-translated the Chinese version of the questionnaire into English with the help of two additional bilingual translators to ensure translation accuracy and conceptual equivalence between the English and Chinese versions of the questionnaire. [42]. We also verified the validity of the questionnaire measures by conducting in-depth online interviews with six managers from respective firms. Before formally administering the survey, we pretested the survey instrument with 20 business managers enrolled in an MBA program at a university. We also slightly modified a few questionnaire items based on the interviews’ feedback and pretested them to ensure the accuracy and relevance of the questionnaire items. In particular, prior research has noted the potential challenges researchers face in collecting primary firm data in China and specifically emphasized the importance of developing trust with respondents to increase responses and ensure the quality of the responses [43]. Therefore, to encourage the respondents to participate in the survey and ensure high-quality responses, we administered the formal survey by hiring a renowned market research company in China. With these careful survey procedures, we received 386 responses. After excluding 17 questionnaires with incomplete data on some key variables, we utilized 369 completed and usable responses in our final data analysis.

3.2. Bias Testing

Nonresponse bias that may arise in survey data possibly influences our final results. Thus, we checked for nonresponse bias by comparing the early-responding firms as the proxy for responding and late-responding firms as the proxy for nonresponding firms on key firm characteristic variables (e.g., firm sales, number of employees, and firm age) [44]. The results of our t-tests between early- and late-responding firms demonstrated no statistical difference in firm sales, the number of employees, and firm age (p < 0.05), showing that the nonresponse bias is less likely to arise in our data.
We also checked for common method variance (CMV), which may arise in survey data. However, for several reasons, we do not believe CMV could be a serious concern in our data to influence the statistical results. First, we separated the items of our measures included in the questionnaire into several subsections and used different formats, which may be helpful to avoid any simple “straight line” response pattern [45,46]. Second, we attempted to reduce the arising of possible CMV by randomizing the order of the items on the questionnaire through unique software. Finally, we assure all respondents of their responses’ anonymity and confidentiality in the cover letter accompanying the questionnaire. The respondents were informed that their responses would be used only for academic research purposes. More importantly, the questionnaire has no right or wrong answers. Thus, they should honestly answer each questionnaire. Nevertheless, we checked for the potential CMV concern by performing Harman’s one-factor analysis, which Podsakoff, MacKenzie, Lee, and Podsakoff (2003) recommended [47]. Thus, we conducted exploratory factor analysis by entering all the variables in the study into a nonrotated factor structure. The results suggested no general factor, which is apparent in the unrotated factor structure and accounts for a majority of the variance (i.e., more than 50% of the total variance), demonstrating that CMV is less likely to be a serious concern in our study. As a result, either nonresponse bias or CMV is less likely to bias our statistical results in the study.

3.3. Variables and Measurement

Unless noted otherwise, we measured all the dependent, independent, and moderate variables in the study using multiple-item, seven-point Likert scales (“strongly disagree” = 1, “strongly agree” = 7). All the items used to measure the dependent and independent variables were adopted from well-developed scales, considered reliable and valid in prior work. To measure political ties, we used six items that were derived from prior work [5,6,17]. Consistent with prior studies [3,48], we adopted five items to measure the degree of business ties. Following prior studies (e.g., [25]), we measured supply chain management capabilities using five items from prior literature. To measure supply chain risks, we adopted six items from the literature [31]. Following previous studies [49,50], we measured a firm’s intention to adopt B2B e-commerce using five items. To develop the measure of international performance, we used eight items derived from prior work [51,52].

4. Analyses and Results

To examine our hypotheses empirically, we employed structural equation modeling (SEM) [53]. In doing so, we first checked for the reliability and validity of the constructs by performing the measurement model and then tested the hypotheses by estimating the structural model.

4.1. Measurement Reliability and Validity

We present the results of our measurement model in Table 1, which reports the descriptive statistics, standardized factor loadings, average variances extracted (AVEs), and construct reliabilities. As we adopted the measures from well-developed scales in the literature, all measures demonstrated strong reliability and validity. As noted in Table 1, all Cronbach’s alpha values (ranging from 0.858 to 0.896) and composite reliabilities (ranging from 0.898 to 0.916) are greater than 0.80, exceeding the benchmark of 0.70 [54,55]. Therefore, our constructs show strong reliability. Moreover, standardized factor loadings of all constructs are statistically significant, with values greater than 0.70, showing that our measurement model is intensely reliable [56,57].
We also calculated the AVE values for the constructs, and the results suggested that all AVE values (ranging from 0.578 to 0.676) are greater than the cutoff of 0.50, showing that our measures achieved adequate reliability and convergent validity [54]. Moreover, we checked for discriminant validity by comparing the square root of AVE of each construct and all correlations between the construct and other constructs in the model and reported the results in Table 2. Our results suggested that the square root of each construct’s AVE is greater than the correlations between the construct and other constructs, demonstrating adequate discriminant validity [54].

4.2. Hypothesis Testing

Following the assessment of the measurement model, we empirically examined our conceptual framework and research hypotheses. We reported the results of our structural model estimation in Figure 2. Following the approach recommended by Chin (1998) [56], we examined the coefficient of determination R2 and the path coefficients with their respective t-values. As shown in Figure 2, the R2 values for the three endogenous variables (e.g., supply chain management capability, intention to adopt B2B e-commerce, and firm international performance) demonstrated satisfactory explanatory power in our model (ranging from 0.270 to 0.299). Moreover, the results reported in Figure 2 support our expectations by showing that all the constructs are largely verified in the theoretically predicted manner. More specifically, we found a positive and statistically significant relationship between political ties (b = 0.222, p < 0.001) and business ties (b = 0.369, p < 0.001) and a firm’s supply chain management capability. Therefore, H1 and H2 were strongly supported.
We then tested the possible moderating role of supply chain risks in the relationships between political and business ties and supply chain management capability. We found that supply chain risks play an important role in positively moderating the respective effects of political ties (b = 0.107, p < 0.05) and business ties on supply chain management capability (b = 0.101, p < 0.05), supporting H3a and H3b. We also found strong evidence of a positive relationship between supply chain management capability and the respective intention to adopt B2B e-commerce (b = 0.409, p < 0.001) and firm international performance (b = 0.378, p < 0.01). Therefore, H4 and H5 were strongly supported. Finally, we tested the effect of the intention of a firm to adopt B2B e-commerce on the firm’s international performance. We found a positive and statistically significant relationship between a firm’s intention to adopt B2B e-commerce and its international performance (b = 0.296, p < 0.001), providing strong support for H6.
Finally, while exploring the mediating effects is beyond the scope of our study, we examined any possible mediating role of either supply chain management capability or intention to adopt B2B e-commerce and summarized the results in Table 3. As shown in Table 3, supply chain management capability was found to play an important role in mediating the effects of political ties (indirect effect: b = 0.091, p < 0.01) and business ties (indirect effect: b = 0.151, p < 0.001) on the intention of a firm to adopt B2B e-commerce. Similarly, we found an important mediating role of a firm’s intention to adopt B2B e-commerce in the relationship between its supply chain management capability and international performance (indirect effect: b = 0.121, p < 0.001).
We further verified the mediating roles of a firm’s supply chain management capability and intention to adopt B2B e-commerce by following Zhao et al. [59]’s procedure for estimating mediation. The results again provided strong evidence of the mediating roles of a firm’s supply chain management capability and intention to adopt B2B e-commerce. Overall, these findings of mediation tests suggest that a firm’s supply chain management capability plays a vital role in mediating the effects of political and business ties on the firm’s intention to adopt B2B e-commerce. At the same time, a firm’s intention to adopt the B2B platform also plays an essential role in mediating the effect of the firm’s supply chain management capacity on its international performance. We discussed the empirical findings and important implications in the following section.

5. Discussion, Implications, and Future Research

5.1. Discussion and Implications

Building upon resource dependence theory, this study attempted to identify the relationships between supply chain risk, political ties, business ties, supply chain management capabilities, intention to adopt a B2B platform, and international performance outcomes. This study contributes to the literature by theorizing and empirically addressing how supply chain management may contribute to firms’ international performance in emerging markets. A study of supply chain capability management and its effect on the firm’s international performance is timely and relevant to real-life platform-based ecosystems, given the sharply increased supply chain risks of the current business contexts.
The results of our study provide several important practical implications for helping emerging market firms. Such firms from China better clarify their competitive position in the global supply chain by differentially identifying specific impacts of supply chain management both on the adoption of B2B e-commerce platforms and the internationalization performance of these firms. Thus, they are expected to provide important and effective implications for firms to enhance their international performance.
First, while the results suggest that political and business ties contribute positively to supply chain capability development, their roles are expected to differ. Political ties can help firms align with government expectations, gain more government support, minimize political uncertainties, improve coordination and integration in their supply chain capabilities, and thus help them manage their supply chains smoothly. On the contrary, business linkages are expected to help major firms in the supply chain share information, understand customer preferences, grasp market dynamics promptly, and effectively enhance the supply chain’s responsiveness and information exchange capabilities. To sum up, to enhance supply chain management capability, firms should emphasize the importance of managing the supply chain effectively and firmly building political and business ties, in particular when facing strong supply chain risks.
Second, our findings further demonstrated that supply chain management capability positively contributes to the intention to adopt B2B e-commerce platforms. We argued that the importance of developing and enhancing supply chain management capabilities in shaping the intention to adopt e-commerce platforms is particularly of high practical significance for firms in emerging markets, such as China, given the relatively strong motivation and need for the effective supply chain management. Meanwhile, firms in these markets should also be aware that the intention to adopt B2B e-commerce platforms also plays a vital role in explaining the difference in international performance among these firms. Therefore, to improve their international performance, firms should actively utilize B2B e-commerce platforms, analyze user data, diversify their products, and use B2B e-commerce platforms as an important channel to internationally diversify their business and enhance their international performance.
Finally, the results reveal that supply chain capability development plays a positive role in enhancing internationalization performance. Although the overall scale of the Chinese industry is huge and China has quickly emerged as the world’s largest manufacturing powerhouse, the level of supply chain modernization in the whole industrial chain remains relatively low, and it is located either in the middle or low-end of the global value chain ecosystems. In particular, coupled with the deepening influence of China-US economic and trade disputes, Chinese firms should pay close attention to developing and improving their supply chain management capabilities. Thus, firms should strengthen their inherent operational resources and organizational strength by adopting a long-term perspective.

5.2. Limitations and Future Study

Like all studies, our study is not without limitations, offering opportunities for future research. First, our study empirically examined the conceptual framework by focusing on firms in the world’s largest emerging market, namely, China. To establish the generalizability of our findings, we encourage future research to replicate our study using a sample of firms from other different research contexts and to capture additional institutional environments. Moreover, we attempted to capture the role of business and political ties in enhancing supply chain capability development. However, we only examined the direct effect of business and political tiles on a firm’s supply chain capability development. It would be helpful for more research to theorize and empirically examine the indirect mechanisms through which business and political ties, and other types of ties, shape the development of supply chain capability.
In addition, our study analyzes the moderating effect of only one form of supply chain uncertainty (i.e., supply chain risk). Future research could examine how other types of supply chain uncertainty create direct or indirect effects on the development of supply chain capability in various industry value chains and ecosystems. Finally, due to the very nature of our study based on cross-sectional data, we are unfortunately unable to capture the dynamic nature of ties and supply chain management capability in the strategic supply chain management process. Therefore, our work suggests future work should more directly consider how changes in political and business ties or supply chain management capability may lead to changes in the firm’s intention to adopt B2B platforms and international performance outcomes by collecting longitudinal data.

Author Contributions

Conceptualization, writing, and investigation, M.W.; methodology and writing—review and editing, S.X. All authors have read and agreed to the published version of the manuscript.

Funding

This research was supported by Sookmyung Women’s University Research Grants (Grant Number: 1-2203-2039).

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Not applicable.

Data Availability Statement

The data will be available upon request. The data are not publicly available due to privacy or ethical restrictions.

Conflicts of Interest

The authors declare no conflict of interest.

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Sustainability 15 00208 g001 550
Figure 1. Conceptual framework.
Figure 1. Conceptual framework.
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Figure 2. Estimated results of the hypothesis tests using a structural equation modeling.
Figure 2. Estimated results of the hypothesis tests using a structural equation modeling.
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Table
Table 1. Descriptive statistics, construct measurement, and validity assessments.
Table 1. Descriptive statistics, construct measurement, and validity assessments.
Construct and IndicatorsMeanSTDSFL
Political ties (PT: AVE = 0.632, alpha = 0.884, CR = 0.912) ([6,17,58])
 PT15.2851.3610.823
 PT25.5581.1370.778
 PT35.4631.2360.807
 PT45.4471.2290.784
 PT55.3961.3810.799
 PT65.3711.3330.779
Business ties (BT: AVE = 0.660, alpha = 0.871, CR = 0.907) ([3,48])
 BT15.7451.0360.832
 BT25.6961.1590.821
 BT35.5091.0570.794
 BT45.2900.9770.801
 BT55.6721.0740.814
Supply chain management capability (SCC: AVE = 0.638, alpha = 0.858, CR = 0.898) ([25])
 SCC15.6101.0990.780
 SCC25.5091.1620.832
 SCC35.5531.2040.816
 SCC45.5911.0300.783
 SCC55.2301.2360.781
Supply chain risk (SCR: AVE = 0.636, alpha = 0.886, CR = 0.913) ([31])
 SCR13.1681.5170.779
 SCR23.0301.4530.834
 SCR33.0411.4360.791
 SCR42.7021.3430.785
 SCR52.8211.3360.789
 SCR62.7671.2860.805
Intention to adopt B2B e-commerce (ITA: AVE = 0.676, alpha = 0.880, CR = 0.912) ([49,50])
 ITA15.6721.0990.798
 ITA25.6291.1570.849
 ITA35.8481.0840.836
 ITA45.5881.1520.811
 ITA55.7241.1210.816
International performance (IP: AVE = 0.578, alpha = 0.896, CR = 0.916) ([51,52])
 IP15.4091.1250.773
 IP25.3251.0780.775
 IP35.2361.1510.740
 IP45.2221.2180.763
 IP55.5231.0490.750
 IP65.3901.0380.772
 IP75.4471.0320.744
 IP85.5041.1220.764
Note: SFL—standardized factor loading, AVE—average variance extracted, CR—composite reliability, STD—standard deviation. Due to space constraints, we do not report the detailed measurement items available from the corresponding author upon request.
Table
Table 2. Correlations and discriminant validity among the constructs.
Table 2. Correlations and discriminant validity among the constructs.
Constructs123456
1. Political ties0.795
2. Business ties0.5580.813
3. Supply chain management capability0.4280.4930.799
4. Supply chain risk−0.356−0.336−0.3410.797
5. Intention to adopt B2B e-commerce0.3380.3450.498−0.3050.822
6. International performance0.3370.3440.524−0.2620.4770.760
Note: Figures in italicized bold are the square root of the AVE of each study construct.
Table
Table 3. Results of structural model assessment for direct and indirect effects.
Table 3. Results of structural model assessment for direct and indirect effects.
EffectEstimatep-Value
Direct effects
Political ties → Supply chain management capability0.222***
Business ties → Supply chain management capability0.369***
Political ties → Intention to adopt B2B e-commerce0.120n.s.
Business ties → Intention to adopt B2B e-commerce0.077n.s.
Supply chain management capability → Intention to adopt B2B e-commerce0.409***
Supply chain management capability → International performance0.378***
Intention to adopt B2B e-commerce→ International performance0.296***
Indirect effects
Political ties → Supply chain management capability → Intention to adopt B2B e-commerce0.091**
Business ties → Supply chain management capability → Intention to adopt B2B e-commerce0.151***
Supply chain management capability → Intention to adopt B2B e-commerce → International performance0.121***
Note: ** p < 0.01, *** p < 0.001; n.s.—nonsignificant.
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Wang, M.; Xiao, S. How Do Political and Business Ties Matter for Supply Chain Management Capability? An Empirical Test of an Integrative Framework. Sustainability 2023, 15, 208. https://doi.org/10.3390/su15010208

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Wang M, Xiao S. How Do Political and Business Ties Matter for Supply Chain Management Capability? An Empirical Test of an Integrative Framework. Sustainability. 2023; 15(1):208. https://doi.org/10.3390/su15010208

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Wang, Mengmeng, and Shufeng (Simon) Xiao. 2023. "How Do Political and Business Ties Matter for Supply Chain Management Capability? An Empirical Test of an Integrative Framework" Sustainability 15, no. 1: 208. https://doi.org/10.3390/su15010208

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