Disasters, Social Commitment, and Supply Chain Dynamics

Abstract

This study investigates the role of customer social commitment in sustaining international buyer-supplier relationships and shaping the resilience of global supply networks when confronted with major disruption events. Utilizing the 2011 Japanese earthquake as an exogenous shock and container-level import data, we find that customers with low social commitment cut 24% of suppliers and reduced 30% of containers from Japan after the disaster compared to high-commitment customers. The effects are robust to the other two major disasters in the 2010s. Low-commitment customers also decreased imports from other high earthquake-risk countries by 10%, while imports from low-risk countries increased by 13%. For high social commitment customers, abandoning disrupted suppliers is associated with an operation efficiency gain but also a reputation loss.

Keywords: Disaster, Corporate social responsibility, Firm resilience, Switching cost, Global supply network

JEL Classification: G32, L14, M14