Buying from stability: cross-border geopolitical risk and transaction value reallocation in global supply chains

Purpose This study investigates how cross-border geopolitical risk (GPR) differences between buyers and suppliers reshape dyadic dependence and drive the reallocation of transaction value in global supply chains. Design/methodology/approach We construct a global panel dataset of cross-border buyer–supplier dyads and measure GPR differences between each dyad's home countries. Ordinary least squares (OLS) regressions with high-dimensional fixed effects at the supplier, customer, and year levels are employed to estimate the effect of cross-border GPR differences on dyadic transaction values. Robustness checks include difference-in-differences (DID), double machine learning, alternative measures, and survival analysis. Findings Large cross-border GPR differences significantly increase dyadic transaction values between suppliers and buyers. This effect is amplified for suppliers with stronger relational resources, operational capabilities, and market resources. However, when GPR differences become extreme, the relationship is more likely to break down, revealing a boundary condition for the reallocation effect. Originality/value This study introduces the GPR difference as a dyadic-level measure of relative geopolitical exposure, reveals that reallocation favors suppliers with greater resource advantages, and finds a boundary beyond which extreme asymmetry precipitates relationship breakdown. Practically, suppliers can leverage institutional stability and firm-level capabilities to capture reallocated procurement, while buyers can treat relationship deepening with partners in stable environments as a strategic response.