Belt and road initiative (BRI) supply chain risks: propositions and model development

Abstract

Purpose Belt and road initiative (BRI) is a transcontinental endeavor strategically connecting supply chains (SCs) and economic infrastructures to ignite business activities and achieve trade benefits. However, the rising global SC failure costs and risks associated with this initiative (owing to unique geopolitical, economic and mega-connectivity involving over 70 countries) necessitate examining BRI SC risks. Yet, research on the subject remains limited, and the purpose of this paper is to address this gap in knowledge. Design/methodology/approach A two-pronged approach was taken. First, a data sample of 554 articles was analyzed and 178 articles found relevant were used to present a systematic, structured framework of risk factors along operational, economic, financial, social and security dimensions. Then informed by the theory of risk management and supplemented by literature evidence, we have built a BRI SC risk model. Findings The results presented through the model show that BRI SCs face a combination of risks triggered by operational processes, informational and environmental (PIE) deficiencies. Findings show that lack of risk and liability management, unbalanced risk-sharing partnerships, lack of transparency, inadequate project evaluation, incompatible corporate governance structures and cyber security all pose threats to BRI SCs specifically and SCs in general. Research limitations/implications Academically, the results facilitate theory development by identifying and proposing seven risk factors and modeling relationship among them and BRI SC risks outcome. The results also extend application of theory of risk management to SC context. Practical implications The findings provide a decision-making tool for managers to assess risk factors in their SCs, thus enabling improved decision making to avoid, mitigate, transfer or accept risks. Originality/value Identifies and proposes a set of seven risk factors that drive BRI SC risks. Develops a model of BRI SC risks which help build theory of SC risk management.