Customer-Country diversification and inventory efficiency: Comparative evidence from the manufacturing sector during the pre-pandemic and the COVID-19 pandemic periods

Jian-yu Fisher Ke, James Otto and Chaodong Han

Journal of Business Research, 2022, vol. 148, issue C, 292-303

Abstract: This study empirically examines the impact of geographic customer diversification on inventory efficiency and proposes a customer-country diversification strategy as a central element of U.S. manufacturing firms’ effort to transform their global supply chains in the aftermath of the COVID-19 pandemic. Using industry-level data during the pre-pandemic period (2003–2018) and the COVID-19 pandemic, this study finds that a geographically diversified customer base significantly reduced inventory efficiency during the pre-pandemic period, but increased inventory efficiency during the COVID-19 pandemic. Our finding suggests that U.S. manufacturing firms may be able to reduce negative impacts on inventory in a global pandemic and achieve greater inventory efficiency if they can target global customer bases with demand characteristics less correlated with U.S. domestic demand.

Keywords: Geographic Customer Concentration; Customer-Country Diversification; Inventory Efficiency; COVID-19; Manufacturing Inventories (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:148:y:2022:i:c:p:292-303

DOI: 10.1016/j.jbusres.2022.04.066

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