Abstract: Major emergencies have had a significant impact on the security of global supply chains. As the micro-constituent entities of the complex production networks, enterprises’ capital allocation is bound to be affected by supply chain risk shocks. Based on the data from Chinese listed companies on the Shanghai and Shenzhen A-share markets from 2007 to 2022, this study employs the text analysis method to quantify supply chain risk shocks at the firm level and empirically examines the impact of supply chain risk on corporate capital allocation behavior. The research findings indicate that an increase in supply chain risk prompts firms to reduce investment in the real economy and increase investment in financial assets. The mechanism test indicates that supply chain risks exacerbate the phenomenon of enterprises“shifting from real to virtual”through two channels: increasing transaction costs and reducing profit levels. The moderating effect test reveals that supply chain diversification mitigates the impact of supply chain risks on enterprises’ shift from real to virtual, while excessive asset specificity intensifies this impact. The heterogeneity analysis finds that the financialization effect of supply chain risks is more pronounced in enterprises with non-export-oriented supply chain configurations, lower resource advantage positions, and lower levels of digital technology. To this end, relevant government departments should accelerate the establishment of a supply chain risk management system, cultivate a healthy market ecosystem, optimize and improve the supply chain network, guide enterprises to rationally adjust their capital allocation strategies, and break the dilemma of financialization of real enterprises.

Key words: supply chain risk, behavior of shifting from reality to virtuality, investment financialization, supply chain diversification, asset specificity