The impact of COVID-19 on supply chain credit risk

• 成果类型: Article
• 署名作者: Agca, Senay; Birge, John R.; Wang, Zi'ang; Wu, Jing
• 署名单位: George Washington University; University of Chicago; Hong Kong Polytechnic University; University of Wollongong; Chinese University of Hong Kong
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.14079
• 发表日期: 2023
• 页码: 4088-4113
• 关键词: CDS; COVID-19 pandemic; Credit risk; Global supply chains

摘要

While global supply chains provide firms with a buffer against local shocks, they expose firms to multiregional risks. The COVID-19 pandemic and its differential impact on different regions in the world offer an opportunity to explore these effects. We investigate the multiregional supply chain risk by focusing on credit risk measured by abnormal credit default swaps (CDS) spreads and US-China supply chain networks. Our evidence shows that local risks propagate through global supply chains to other regions. Using a matched sample, we find that abnormal CDS spreads for firms with Chinese supply chain partners increase by 12% to 13% relative to the average raw CDS spreads due to supply chain disruptions during the economic shutdown in China, and the abnormal CDS spreads decrease by 9% to 13% relative to the average raw CDS spreads when the supply chain activities resume in China. We also find that having a more global customer base can mitigate the effects of local household demand shocks. Lastly, we discover that firm size, supply chain network centrality, cash holdings, inventory, strong credit ratings, capital redeployability, and the number of segments increase resilience to global supply chain shocks, while financial leverage, operational leverage, and market competition weaken supply chain resilience.