Order or Chaos? Disentangling the Impact of Anti-Corruption Inspection on Supply Chain Disputes

Supply chain disputes are inescapable in firms’ business operations, yet the role of regulatory enforcement, particularly anti-corruption inspections, in shaping these disputes remains underexplored. Given the increasing regulatory scrutiny in emerging markets like China, understanding how such inspections impact supply chain disputes are both theoretically important and practically relevant. Drawing on institutional theory and signaling theory, this study explores the relationship between anti-corruption inspections and supply chain disputes based on a dataset of 5,437 Chinese A-share listed firms with 50,133 firm-year observations from 2008 to 2023. The findings reveal a negative relationship between anti-corruption inspections and supply chain disputes. Further analysis shows that supply chain involvement during inspections is negatively associated with disputes, while inspection duration exhibits an inverted U-shaped relationship with disputes. A series of robustness checks confirm the validity of these results. This study provides valuable insights for the literature, firm managers, and policymakers, offering practical guidance on handling regulatory enforcement in supply chain operations.