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Examining the influence of supply chain glitches on shareholder wealth: does the reason matter?

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  • George A. Zsidisin
  • Boyana N. Petkova
  • Lammertjan Dam

Abstract

This paper investigates how different reasons for supply chain glitches influence shareholder wealth. Prior research indicated that supply chain glitches can decrease shareholder wealth by a staggering 10.28%. We argue that the reason for the supply chain glitch is an important moderator for understanding how supply chain glitches affect shareholder wealth. In this paper we re-assess the effect of supply chain glitches on shareholder wealth for a new time period (i.e. 2001--2012) whilst including the moderators from the original study (growth prospects, firm size, debt-equity ratio and timing) and adding the reason for the supply chain glitch as an important new moderator. Our results show that on average supply chain glitches decrease shareholder wealth by 1.94%. Further, our results indicate that supply chain glitches that arise due to regulatory, catastrophic and infrastructural reasons trigger more significant negative reactions in financial markets as compared with glitches that occur from the supply side. We discuss the implications of our findings both for theory building and for business practice, and end with limitations and suggestions for future research.

Suggested Citation

  • George A. Zsidisin & Boyana N. Petkova & Lammertjan Dam, 2016. "Examining the influence of supply chain glitches on shareholder wealth: does the reason matter?," International Journal of Production Research, Taylor & Francis Journals, vol. 54(1), pages 69-82, January.
    • Handle: RePEc:taf:tprsxx:v:54:y:2016:i:1:p:69-82
    DOI: 10.1080/00207543.2015.1015751
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    Cited by:

    1. Schmidt, Christoph G. & Wuttke, David A. & Heese, H. Sebastian & Wagner, Stephan M., 2023. "Antecedents of public reactions to supply chain glitches," International Journal of Production Economics, Elsevier, vol. 259(C).
    2. Matthias Klumpp & Dominic Loske, 2021. "Sustainability and Resilience Revisited: Impact of Information Technology Disruptions on Empirical Retail Logistics Efficiency," Sustainability, MDPI, vol. 13(10), pages 1-20, May.
    3. Baghersad, Milad & Zobel, Christopher W., 2021. "Assessing the extended impacts of supply chain disruptions on firms: An empirical study," International Journal of Production Economics, Elsevier, vol. 231(C).
    4. K. Katsaliaki & P. Galetsi & S. Kumar, 2022. "Supply chain disruptions and resilience: a major review and future research agenda," Annals of Operations Research, Springer, vol. 319(1), pages 965-1002, December.
    5. Woldt, Jason J. & Prasad, Sameer, 2022. "Crises in global supply chains: The role of impression management communications," International Journal of Production Economics, Elsevier, vol. 252(C).
    6. David M. Goldberg & Jason K. Deane & Terry R. Rakes & Loren Paul Rees, 2022. "3D Printing Technology and the Market Value of the Firm," Information Systems Frontiers, Springer, vol. 24(4), pages 1379-1392, August.

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