Year: 2026
Type: article
Abstract: ABSTRACT This paper examines how firms' positions in supply chain networks affect expected stock returns in China. Using PageRank centrality to measure network embeddedness, we document a robust negative relation between centrality and returns: peripheral firms earn higher returns than central firms. The effect survives extensive controls, alternative centrality measures, and a wide range of robustness tests. Pricing tests indicate that the return differential reflects compensation for systematic risk rather than mispricing. Further analysis shows that peripheral firms face higher operating and asset‐specificity risks, particularly in high‐asymmetry industries and among firms with weaker bargaining power, stronger competition, and tighter resource constraints.
Source: European Financial Management
DOI: 10.1111/eufm.70052
Authors: Xueying Ren, Libo Yin, Jier Zhang
Institution: Central University of Finance and Economics
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: bronze
Award: G6542310906
OpenAlex ID: W7128805237