The corporate governance, supplier network and firm supply performance

Abstract

Corporate governance has emerged as a sine-qua of corporate success. The stakeholder theory of corporate governance consists of various factors, other than the economy and finance and considers corporate governance as an important determinant of the supply chain performance and the supplier relationship. Following the stakeholder theory, the current study studies the impact of the corporate governance, and supplier diversification network on the firm supply performance. In addition, the current study investigates the moderating role of supplier diversification in the relationship between three corporate governance characteristics; namely board size, board independence, and board competency and firm supply performance. The study is carried out on a sample of the industrial firm in Indonesia. To achieve the research objectives PLS-SEM technique is employed. The findings of the study provide a great deal of agreement with the proposed hypotheses. The findings of the current study are helpful for the policymakers, researchers and practitioner in examining and understanding the link between corporate governance, supplier network and firm supply performance.