Effect of integration capabilities with channel distributors on supply chain agility in emerging markets: an institution-based view perspective

With emerging markets representing great growth opportunities and serving as indispensable components in the global supply chain, it is unclear how well modern supply chain management theories developed in advanced markets apply to emerging markets. This study integrates the institution-based view with supply chain management literature to examine how integration capabilities can be leveraged to achieve supply chain agility in emerging markets and how the efficacy of integration capabilities is shaped by internal and external institutional contexts.

This study examines how firms in emerging markets can leverage their platform integration and knowledge integration capabilities with channel distributors to improve the supply chain agility and how such relationships are shaped by both the internal (proxy by ownership structure) and external (proxy by regional openness) institutional contexts in which firms operate. Survey and archival data collected from 207 firms operating in China, one of the largest emerging markets, were used to test the proposed research model.

The results reveal that platform integration and knowledge integration are two driving forces for supply chain agility in the emerging markets. Moreover, the results indicate that state-owned firms are able to achieve higher supply chain agility from their investments in knowledge integration with channel distributors than non-state-owned firms. While firms in regions with a high level of openness enjoy higher supply chain agility from knowledge integration, firms in regions with a low level of openness can catch up by investing in platform integration with their channel distributors.

The authors extend the extant study on supply chain integration (SCI) research to examine how operational and strategic integration with channel distributors can help the focal firm achieve supply chain agility in emerging markets. The study results also enrich the existing studies in emerging markets by revealing the importance of the institutional context in which firms operate on B2B channel management.