Topic:

Word-of-Mouth Turbulence and Vertical Crisis Spillover in Supply Chains: A Selective Attention Perspective

Time&Date: 

10:15 am - 11:30 am, June 13, 2024 (Thursday)

Venue

Room 619, Teaching A Building

Zoom Link: 
https:

https://cuhk-edu-cn.zoom.us/j/4439404336?pwd=NTZ1c0NjQWtHaFljV0NMWVY1ZUNKdz09
Meeting ID: 443 940 4336

Speaker:

Prof. Xiaosong Peng (Lehigh University)

This study presents an integrated lens of how the negative effects of organizational crises spread in supply chains, and how turbulence in Word-of-Mouth (WOM) communication via social media, characterized by unpredictability and uncertainty, influences this spillover. We hypothesize and confirm that selective attention, reflected by the valence and variance of WOM, is a key underlying mechanism driving the spillover among supply chain partners. The study further examines how these spillover effects vary depending on supply chain characteristics, such as location (supply-side vs. demand-side), size (small vs. large), and dependency (close vs. weak). We constructed a multi-source panel dataset that combines data on organizational crises, crisis-related WOM, and the market values of supply chain firms in China from 2011 to 2020. For the empirical analysis, we used panel vector autoregression (PVAR) with a generalized method of moments (GMM) estimation. The findings reveal that crisis-induced WOM turbulence significantly intensifies the negative spillover to supply chain partners. Furthermore, crisis-induced WOM is more likely to spill over to downstream, large and closely dependent supply chain partners with high salience. We also discover that the supply-side and demand-side of the supply chain exhibit distinct patterns of crisis spillover. Additionally, we find that WOM turbulence differently affects operational and social crises. These findings provide valuable theoretical contribution to the research on organizational crisis spillover, WOM-firm value relationship, and supply chain risk management. They also offer practical guidance for operation risk management to both managers and investors.
Keywords: crisis spillover, supply chain risk, word-of-mouth turbulence, panel vector autoregression, selective attention theory

Biography:

Xiaosong (David) Peng is professor and associate dean and holds dean’s chair professorship in the College of Business, Lehigh University. Professor Peng completed his doctoral degree in Operations Management from the Carlson School of Management, University of Minnesota and a master’s degree in information systems management from Carnegie Mellon University. Professor Peng’s research interests are in operations and supply chain strategy, service and manufacturing technology management, healthcare operations management, and empirical research methods. Professor Peng’s research has appeared in Manufacturing and Service Operations Management, Journal of Operations Management, Production and Operations Management, Decision Sciences, Journal of Supply Chain Management, among others. He is currently department editor for Journal of Operations Management, senior editor for Production and Operations Management, and associate editor for Decision Sciences Journal and Journal of Supply Chain Management.