Biodiversity Risk and Bullwhip Effect

This study examines how firm-level biodiversity risk amplifies the supply chain bullwhip effect using Chinese A-share listed companies over 2011–2023. Fixed-effects panel regressions show that higher biodiversity risk exposure significantly widens supply-demand volatility divergence along the supply chain. This finding withstands a battery of robustness checks, including instrumental variable estimation (2SLS), Heckman two-stage selection models, propensity score matching, and entropy balancing. Mechanism analysis identifies three transmission channels: biodiversity risk reduces labor allocation efficiency, erodes supply chain bargaining power, and intensifies market competition, each disrupting accurate demand signal propagation and amplifying the bullwhip effect. Heterogeneity analyses reveal that these effects are more pronounced among state-owned enterprises, firms in eastern and central China, and low risk-taking firms. Further analysis shows that capacity utilization, executive equity incentives, and environmental investment attenuate this relationship, while customer concentration reinforces it. These findings extend biodiversity risk research beyond financial performance to supply chain operational efficiency.