Mitigating the innovation constraints of supply chain concentration: An operational resilience perspective

This study integrates network embeddedness theory and the dynamic capability view to explore the impact of upstream and downstream supply chain concentration (supplier and customer concentration, respectively) on corporate innovation, and the moderating effect of operational resilience and its industry heterogeneity. Analysing data from Chinese A-share listed firms from 2014 to 2022 reveals that both supplier and customer concentration significantly inhibit corporate innovation. Meanwhile, operational resilience can somewhat reduce the negative effects in both cases. However, this effect is structurally uneven. Specifically, it is significant only for downstream customer concentration, while its impact on upstream supplier concentration is not significant. In addition, this moderating effect varies across high-tech and non-high-tech industries, and between competitive and regulated industries. Furthermore, the inhibitory effects of supplier and customer concentration on innovation also exhibit heterogeneity between high-tech and non-high-tech industries, and between competitive and regulated industries. Overall, this study reveals the constraining effect of the supply chain structure on firm innovation and the moderating role of operational resilience. This provides valuable empirical evidence for firms to optimise their innovation strategies and enhance their dynamic response capabilities in complex supply chain environments. • Supplier and customer concentration both suppress corporate innovation. • Resilience buffers customer concentration impact, but not for suppliers. • Resilience's moderating role varies between high-tech and other sectors. • Resilience's impact differs across competitive and regulated industries.