Can the “Little Giant” label enhance firms’ supply chain positions?

Abstract

Strong supply chain relationships are crucial for stabilizing stock prices and enhancing profitability. However, existing research on the impact of national-level innovation policies on firms’ supply chain relationships remains limited. Based on data from Chinese listed firms between 2015 and 2022, the paper employs a staggered difference-in-differences approach to analyze how the ”Specialized, Refined, Distinctive, and Innovative (SRDI) Little Giant” label affects firms’ influence within the supply chain. Our results indicate that, on average, small and medium-sized enterprises designated as SRDI Little Giant experience reductions in customer concentration and supplier concentration by 1.38% and 1.78%, respectively, compared to other firms. Furthermore, the label strengthens SMEs’ supply chain position by improving access to long-term financing.