Does Supply Chain Digitalization Buffer the Impact of Geopolitical Risk on Firm Performance? Evidence from Manufacturing Firms in Emerging Asian Economies

The impact of geopolitical risk on the performance of manufacturing companies in emerging Asian economies was analyzed with the mediation of resilience of supply chains and the moderation of digitalization of these chains. The proposed model was validated using the survey data collected from around 500 managers from Pakistan, India, Bangladesh, Vietnam, and Indonesia. The results revealed that geopolitical risk significantly has an adverse effect on firm performance and supply chain resilience, while resilience has an effect that is beneficial to firm performance. The geopolitical risk–performance relationship was greatly mediated by supply chain resilience. Additionally, higher the digitalization in the supply chain, the smaller was the impact of geopolitical risk on resilience, suggesting that the more resilient firms were, the lower was the impact of geopolitical risk. This study builds on knowledge on geopolitical risks and digital supply chain literature and combines two areas of research: information-processing and dynamic capability.