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COVID-19, Supply Chain Breakdowns, and Firm Value

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  • Changyuan Xia
  • Junjie Yang
  • Na He
  • Kam C. Chan

Abstract

By exploiting the lockdown of Wuhan on January 23, 2020, during the COVID-19 pandemic and the disclosure of public firms’ top five suppliers, we examine the impact of a supply chain disruption on stock returns. Our findings suggest that firms with major suppliers in Wuhan experience significantly worse cumulative abnormal returns than those whose suppliers are not located in Wuhan. The results are robust to alternative estimation methods, event windows, and supply chain disruption metrics. Our findings suggest that supply chain disruption contributes to negative stock returns and highlight the importance of supply chain disruption on firm value.

Suggested Citation

  • Changyuan Xia & Junjie Yang & Na He & Kam C. Chan, 2023. "COVID-19, Supply Chain Breakdowns, and Firm Value," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 59(8), pages 2370-2382, June.
    • Handle: RePEc:mes:emfitr:v:59:y:2023:i:8:p:2370-2382
    DOI: 10.1080/1540496X.2022.2026767
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