Supply chain transparency and firm performance: the role of customer trust

Supply chains are of vital importance in today's business operations. This research explores the implication of supply chain transparency for firm outcomes. Exploiting a large dateset comprising 2401 listed companies in China, this study finds that supply chain transparency improves firm financial performance and customer trust represents one of the crucial economic mechanisms underpinning this link. Further research demonstrates that the positive association is more evident for downstream firms and firms operating in highly competitive industries. These conclusions remain robust after dealing with sensitivity and endogeneity tests. This research extensively complements the fast-growing strand of literature on supply chains.