Signaling in the Supply Chain: Can Climate Risk Disclosure Mitigate the Bullwhip Effect? Evidence from China

This study explores the operational impact of non-financial disclosure, specifically whether corporate climate risk disclosure (CRD) helps mitigate the bullwhip effect (BWE) in supply chains. Grounded in signaling and stakeholder theories, the authors propose that high-quality CRD reduces inter-firm information asymmetry and signals stronger operational resilience, thereby dampening demand variability. Analyzing data from Chinese A-share listed manufacturing firms between 2013 and 2022, the study finds a significant negative relationship between CRD quality and the magnitude of the BWE. This effect is stronger in firms with better corporate governance. To address potential endogeneity, the study uses a difference-in-differences (DiD) approach based on the 2018 revision of China’s corporate governance guidelines and a two-stage least squares (2SLS) method. Results remain robust, highlighting CRD’s role in enhancing supply chain stability beyond its capital market effects.