Optimizing cost in pharmaceutical supply chains: the roles of financial risk capability, political environment and supply chain innovation

Purpose This study examines the moderating effect of political environment (PE) and supply chain innovation (SCI) on the relationship between financial risk capability (FRC) and cost optimization (COP) within pharmaceutical supply chains. Design/methodology/approach A quantitative research approach was employed, using a cross-sectional survey. The data is collected from 385 pharmaceutical firms. Hierarchical regression and structural equation modeling analyses are used to assess the relationships between the variables. Findings The results indicate that financial risk capability has a significant negative effect on cost optimization. Political environment and supply chain innovation are negative and positive moderators of the relationship, respectively. The net moderating effect of political environment and supply chain innovation is positive. Originality/value This study contributes to the literature by establishing the nature of the relationship between financial risk capability, political environment, supply chain innovation and cost optimization in pharmaceutical supply chains.