Buyer green innovation volatility and the supplier bullwhip effect: a signalling theory perspective
Yan Hou, Shuili Yang, Lixu Li, Lujie Chen, Chenho ChaoPurpose
Buyers' green innovation does not remain confined within the firm; its volatility may ripple upstream and reshape suppliers' operations. Drawing on signalling theory, we examine how buyers' green innovation volatility (GIV) affects the supplier bullwhip effect (SBE), and how buyers' green supplier management (GSM) and inventory utilisation efficiency (IUE) moderate this effect.
Design/methodology/approach
We construct a dyadic dataset covering 436 Chinese buyer firms and 871 global suppliers from 2012 to 2022, and employ fixed-effects models to test our hypotheses.
Findings
There is a U-shaped GIV–SBE relationship: compared with both low and high levels of GIV, moderate GIV leads suppliers to adjust production more cautiously in response to unstable demand, resulting in lower SBE. When buyers' green innovation is on an overall downward trend, GSM helps suppliers interpret demand and operational changes more accurately, curbing GIV-induced increases in SBE. Higher IUE enables suppliers to detect GIV-related requirement changes more promptly, prompting stronger production responses and widening the SBE gap between moderate and low or high GIV.
Originality/value
By introducing GIV, our study identifies a novel antecedent of SBE and provides insights into how buyers can help suppliers accurately interpret GIV and calibrate their operational responses.