Supply Chain Reliability and International Economic Growth: Impacts of Disruptions Like COVID-19

24 Pages Posted: 20 May 2020

See all articles by Rajeev K. Goel

Rajeev K. Goel

Illinois State University - Department of Economics

James W. Saunoris

Eastern Michigan University

Srishti S. Goel

Southern Illinois University - School of Medicine

Date Written: 2020

Abstract

Reliable supply chains are crucial to the productivity and economic growth of nations. Despite the recognition of its importance, formal research on the contribution of supply chain logistics, including the relative impacts across different logistics dimensions, is less. The importance of supply chains has been recently been brought to the forefront in the wake of the challenges posed by the coronavirus crisis. This paper uses data over a recent decade for more than 130 nations to examine the relative effects of the different aspects of supply chain logistics on economic growth. Placing the empirical framework in a standard growth model, results show that improvements in the aggregate supply chain logistics performance yield positive growth dividends. These dividends are also present in most disaggregated dimensions of logistics, with the performance of the timeliness of shipments having the greatest positive impact on growth. The growth impacts of investment, labor growth, labor quality, are positive and in line with the extant literature. A simulation exercise discussed some supply chain disruption scenarios and their growth implications that could provide useful for nations in planning for the challenges posed by the COVID-19 crisis.

Keywords: economic growth, supply chain, logistics, infrastructure, disruptions, coronavirus

JEL Classification: O400, L800, L910

Suggested Citation

Goel, Rajeev K. and Saunoris, James W. and Goel, Srishti S., Supply Chain Reliability and International Economic Growth: Impacts of Disruptions Like COVID-19 (2020). CESifo Working Paper No. 8294, Available at SSRN: https://ssrn.com/abstract=3603829 or http://dx.doi.org/10.2139/ssrn.3603829

Rajeev K. Goel (Contact Author)

Illinois State University - Department of Economics ( email )

Normal, IL 61790-4200
United States

James W. Saunoris

Eastern Michigan University ( email )

Eastern Michigan University
Ypsilanti, MI 48197
United States

Srishti S. Goel

Southern Illinois University - School of Medicine ( email )

P.O. Box 19620
Springfield, IL 62794-9620
United States

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