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Supply chain dynamics after the COVID-19 pandemic and stock market performance: Evidence from the US

Author

Listed:
  • Gibilaro Lucia

    (University LUMSA. Department of Law, Economics, Politics and Modern languages Via Pompeo Magno, 28 - 00192 Rome, Italy.)

  • Mattarocci Gianluca

    (University of Rome Tor Vergata. Department of Management and Law, Via Columbia 2 – 00133 Rome, Italy.)

Abstract

Supply chain risk is a strategic issue for managing multinational companies, and Covid-19 has shown the relevance of this type of risk for the firm’s survival probability. The market may perceive the choice of replacing some of the main customers or suppliers as an increase or a decrease of the risk based on the features of the new supply chain members, and markets tend to penalize companies that increase their exposure to unaffordable events. During the pandemic, many supply chains suffered from glitches and companies were obliged to redefine their network by selecting their new strategic customers and/or suppliers. The paper evaluates the supply chain composition strategies of a set of multinational companies based in the US during the last decade. It highlights the differences in supply chain management behavior before and during the pandemic. Data collected allow testing the impact on the stock market performance of modifying the supply chain network by adding new members that may have a different level of risk. Results show that the market reaction to supply chain updates changed after the Covid-19, and nowadays there is greater attention on the credit risk of the new companies entering the supply chain.

Suggested Citation

  • Gibilaro Lucia & Mattarocci Gianluca, 2022. "Supply chain dynamics after the COVID-19 pandemic and stock market performance: Evidence from the US," Economics, Sciendo, vol. 10(2), pages 45-62, December.
    • Handle: RePEc:vrs:econom:v:10:y:2022:i:2:p:45-62:n:9
    DOI: 10.2478/eoik-2022-0016
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    References listed on IDEAS

    as
    1. Kevin B. Hendricks & Brian W. Jacobs & Vinod R. Singhal, 2020. "Stock Market Reaction to Supply Chain Disruptions from the 2011 Great East Japan Earthquake," Manufacturing & Service Operations Management, INFORMS, vol. 22(4), pages 683-699, July.
    2. Maureen S. Golan & Laura H. Jernegan & Igor Linkov, 2020. "Trends and applications of resilience analytics in supply chain modeling: systematic literature review in the context of the COVID-19 pandemic," Environment Systems and Decisions, Springer, vol. 40(2), pages 222-243, June.
    3. A. Craig MacKinlay, 1997. "Event Studies in Economics and Finance," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 13-39, March.
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    More about this item

    Keywords

    Supply chain; Pandemic; Stock performance;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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    Access and download statistics

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