Title: Invisible Threats, Visible Losses: LLMs-Analysed Supply Chain Cybersecurity Risk and Corporate Product Market Power

Speaker: Jia Liu, Professor, the University of Portsmouth

Time: 14:30-16:00, June 23, 2026 (Tuesday)

Venue: Room 1008, Mingde Business Building (Zhongguancun Campus)

Language: English/Chinese

ABSTRACT:

We examine how supply chain cybersecurity risk (SCCR) affects firms’ competitive performance in product markets. Using large language models (LLMs) and text analysis of Chinese media reports from 2011–2024, we construct a novel firm-level measure of SCCR. Building on incomplete contract theory, we find that higher SCCR creates contractual frictions and financing constraints that impair firm’s competitive positioning and strategic market outcomes. Mechanism analyses indicate that SCCR primarily operates through two channels: disrupting product quality management and constraining commercial trade credit financing. The adverse effects are more pronounced among firms with greater supply chain bargaining power, higher consumer exposure, downstream positions in industrial chains, and weaker regional supply chain infrastructure. Digital strategic alliances with suppliers and stronger digital risk governance attenuate these effects, whereas alliances with customers amplify them. Overall, our findings reveal how cybersecurity vulnerabilities embedded in supply chains translate into tangible product market losses, offering new insights into digital risk management and competitive dynamics in the digital economy.