From Shock Absorption to Strategic Gain: How Internal and External Supply Chain Resilience Capabilities Drive Sustainable Competitive Advantage in China

Abstract

The purpose of this research is to gain an understanding of how internal and external supply chain resilience capabilities relate to sustainable competitive advantage in China’s logistics industry. Drawing on the dynamic capabilities’ theory and the resource-based view, the research design is developed to propose a framework in which the capacity of internal shock absorption and the resilience developed through cooperative network becomes the source of strategic performance increases. It also studies the mediation role of external resilience and the synergistic interaction between internal and external capabilities to strengthen the sustainable competitive advantage. The study conducted was mixed method. First, in-depth interviews with Chinese logistics managers were conducted to refine the main constructs. Then, a questionnaire of 300 logistics companies in mainland China was conducted. Measurement scales for internal resilience (e.g., flexibility, redundancy), external resilience (e.g., supplier collaboration, visibility) and sustainable competitive advantage (e.g., long-term market and operational performance) were tailored from previous research. Structural Equation Modelling was applied to test the direct, mediator and moderator relations among variables. Internal supply chain resilience capabilities are strongly positively related to external resilience and sustainable competitive advantage. External Resilience has a strong positive influence on sustainable competitive advantage as well. external resilience partially mediates the relationship between internal capabilities and sustainable competitive advantage, demonstrating that part of the value of internal resilience is realized through greater network resilience. A significant interaction effect is also found, with firms with high levels of external resilience gaining greater competitive benefit from high levels of internal resilience, showing there is a synergistic effect. These findings demonstrate the necessity of balancing internal preparedness and external collaboration in order to translate resilience into long-term improvements in performance. All five hypothesized hypotheses are supported. This study combines the dynamic capabilities theory and the resource-based view by identifying internal and external resilience capacities and associating the same with sustainable advantage in China’s logistics industry. It presents a holistic model of the supply chain resilience capabilities in the Chinese context and offers practical guidelines for managers and policymakers.