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The Role of Business Environment and Digital Government in Mitigating Supply Chain Vulnerability—Evidence from the COVID-19 Shock

China Center for Internet Economy Research (CCIE) Research Paper No., 2023

15 Pages Posted: 22 Feb 2023

See all articles by Huimin Liu

Huimin Liu

Central University of Finance and Economics (CUFE) - China Center for Internet Economy Research

Yupeng Shi

Central University of Finance and Economics (CUFE) - China Center for Internet Economy Research

Xuze Yang

Central University of Finance and Economics (CUFE) - China Center for Internet Economy Research

Wentao Zhang

Central University of Finance and Economics

Date Written: February 20, 2023

Abstract

In recent years, the continuous spread of the COVID-19 epidemic has impacted the supply chain of enterprises. Mitigating the supply chain's vulnerability has great significance for the survival and development of enterprises. Optimizing the business environment and building a digital government will help improve the external environment for enterprise development. However, its impact on the vulnerability of the enterprise supply chain has yet to be studied. Taking the impact of COVID-19 as an example, this paper uses the survey data of nearly 40,000 enterprises of the National Federation of Industry and Commerce in 2020 and “10,000 private enterprises evaluating the business environment”, to conduct systematic empirical research and fill the research gap in this area. The study indicates that the business environment and digital government can significantly mitigate the impact of COVID-19 on the supply chain. This conclusion is still valid after a series of robustness tests. Mechanism analysis demonstrates that the business environment and digital government can prompt the government to introduce effective mitigation measures promptly, better guarantee production factors and logistics, and thus improve the vulnerability of the enterprise supply chain. This study deepens our understanding of the economic outcome of the business environment and digital government and also sheds new light on supply chain management.

Keywords: supply chain vulnerability, business environment, digital government, COVID-19, mitigation effect

JEL Classification: M21, O38

Suggested Citation

Liu, Huimin and Shi, Yupeng and Yang, Xuze and Zhang, Wentao, The Role of Business Environment and Digital Government in Mitigating Supply Chain Vulnerability—Evidence from the COVID-19 Shock (February 20, 2023). China Center for Internet Economy Research (CCIE) Research Paper No., 2023, Available at SSRN: https://ssrn.com/abstract=4364698 or http://dx.doi.org/10.2139/ssrn.4364698

Huimin Liu

Central University of Finance and Economics (CUFE) - China Center for Internet Economy Research

Yupeng Shi

Central University of Finance and Economics (CUFE) - China Center for Internet Economy Research ( email )

No. 39 Xueyuannan Road, Haidian District
Beijing
China

Xuze Yang (Contact Author)

Central University of Finance and Economics (CUFE) - China Center for Internet Economy Research ( email )

No. 39 Xueyuannan Road, Haidian District
Beijing
China

Wentao Zhang

Central University of Finance and Economics ( email )

770 Middle Road
Dresden, ME 04342
United States

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