An Empirical Study of the Bullwhip Effect in China

An Empirical Study of the Bullwhip Effect in China

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Article ID: iaor201524715
Volume: 23
Issue: 4
Start Page Number: 537
End Page Number: 551
Publication Date: Apr 2014
Journal: Production and Operations Management
Authors: , , ,
Keywords: investment, financial
Abstract:

In this study, we investigate the bullwhip effect in China using data on over 1200 companies listed on the Shanghai and Shenzhen stock exchanges from 2002 to 2009. Specifically, we estimate the ratio of the volatility of production to the volatility of demand as a proxy for the bullwhip effect. Our results show that more than two‐thirds of the companies we studied exhibit the bullwhip effect. We also find that several hypotheses proposed in the existing literature are supported by firm‐level data from China, and that the intensity of the bullwhip effect in China declined during the period from 2002 to 2009.

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