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Impact of Supply Chain Disruptions on Financial Leverage

Author

Listed:
  • William Ginn

    (Labcorp and Coburg University of Applied Sciences)

  • Jamel Saadaoui

    (University of Paris 8)

Abstract

This study investigates the impact of supply disruptions on financial leverage (debt-equity ratio) in the U.S. economy from 1998:Q1 to 2024:Q1. The study employs a linear and non-linear Local Projections (LP) and Bayesian Vector Autoregression (BVAR) models to explore dynamic relationships. While the LP models reveal that a supply chain shock negatively affects leverage with statistically significant results, there is no evidence of state dependence. The BVAR model suggest that a supply chain shock is disruptive via reduction (an increase) in output (inflation), accompanied by lower leverage.

Suggested Citation

  • William Ginn & Jamel Saadaoui, 2024. "Impact of Supply Chain Disruptions on Financial Leverage," Working Papers 2024.11, International Network for Economic Research - INFER.
    • Handle: RePEc:inf:wpaper:2024.11
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    File URL: https://infer-research.eu/wp-content/uploads/2024/07/WP2024.11.pdf
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    More about this item

    Keywords

    Supply chain; leverage; local projections; economic conditions; Bayesian VAR;
    All these keywords.

    JEL classification:

    • F - International Economics

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