Commodity price risk, supply chain, and lending

Degl’Innocenti, Marta, Gianluca Santilli, Alex Sclip and Si Zhou

Energy Economics, 2025, vol. 150, issue C

Abstract: This paper examines the effects of recurring commodity price shocks on supply chains, focusing on oil price fluctuations. We find that affected firms receive less liquidity from suppliers while extending more liquidity to customers to retain them, which further aggravates their financial conditions. We also find that firms extend more trade credit to customers when the lock-in effect is stronger that is when relationships with suppliers are more stable and long-term, and when they are more innovative. Finally, our results indicate that banks impose higher spreads on firms with greater exposure to oil price shocks. Overall, our findings suggest that firms exposed to oil price shocks face greater trade credit liquidity issues and more expensive access to the debt market.

Keywords: Commodity shocks; Supply chain; Trade credit; Lending (search for similar items in EconPapers)
JEL-codes: D2 E23 G21 G3 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:150:y:2025:i:c:s0140988325006358

DOI: 10.1016/j.eneco.2025.108808

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