Download This PaperSupply Chain Risk: Changes in Supplier Composition and Vertical Integration
Journal of International Economics, Forthcoming
SMU Cox School of Business Research Paper No. 22-07
Swedish House of Finance Research Paper No. 22-07
European Corporate Governance Institute – Finance Working Paper No. 848/2022
69 Pages Posted: 18 Feb 2022 Last revised: 21 Nov 2023
There are 3 versions of this paper
Supply Chain Risk: Changes in Supplier Composition and Vertical Integration
Supply Chain Risk: Changes in Supplier Composition and Vertical Integration
Supply Chain Risk: Changes in Supplier Composition and Vertical Integration
Date Written: November 16, 2023
Abstract
Using textual analysis of earnings conference calls, we quantify firms’ supply chain risk and explore how firms react when supply chain risk increases. We show that firms with supply chains that span across continents, multinationals, and firms with fewer suppliers of an input face higher supply chain risk. In addition, firms exhibit high supply chain risk when their suppliers also do so. Firms manage supply chain risk by establishing relationships with closer and domestic suppliers and with suppliers that are industry leaders and by vertically integrating, but they continue to work with suppliers in other continents.
Keywords: Supply chains; nearshoring; fragmentation; textual analysis; vertical integration; M&As
JEL Classification: G31, G34, F15
Suggested Citation: Suggested Citation
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