AbstractThe COVID‐19 pandemic has created significant disruptions in both demand and supply. Our study makes use of such dramatic changes in demand and supply during the pandemic to examine resource dependence and power balancing/unbalancing issues in buyer–supplier relationships. Specifically, we investigate the effect of customer and supplier concentrations on firm resilience during the pandemic. Drawing on resource‐dependence theory (RDT), we theorize that shifts in demand and supply in different pandemic stages influence the effect of customer and supplier concentrations on firm resilience by altering the power dynamics between focal firms and their concentrated customers and suppliers. Central to our theorizing is that the worsening power imbalance is more detrimental. Measuring firm resilience by loss and recovery (i.e., change) in productivity, our analysis of 23,440 Chinese listed firms' quarter observations from 2019 to 2020 shows that customer concentration is negatively related to firm resilience in the disruption stage but has no effect in the restoration stage. Supplier concentration is positively related to firm resilience in the disruption stage but undermines firm resilience in the restoration stage. These findings largely confirm our theoretical propositions. We discuss the theoretical and managerial implications.

AbstractRefurbishing has promising economic potential, yet firms remain wary of its potential cannibalization effect on new product sales. Firms need to make strategic choices in competitive settings, involving varying brand strengths and collection constraints. The current study provides an empirical characterization of consumer behavior in such complex settings, which in turn informs an analytical model of optimal pricing policies. The results show that cannibalization (or switching) in a competitive environment has a linear relationship with price discounts, unlike the inverted U‐shaped relationship observed in monopolistic settings. The experimental results also highlight the relevance of cross‐cannibalization, especially for weaker firms (with low brand value) that compete with stronger firms to sell refurbished products. Our subsequent analytical results reveal how both competitors should adjust their refurbished product prices when internal and cross‐cannibalization coefficients change. Weaker firms should focus on surpassing stronger competitors in terms of collection and refurbishing efforts, which implies a predominant focus on operations. Finally, we show that refurbished product prices are a function of, and profits are concave in relation to, the number of core products collected by firms.