Using equity market reactions and network analysis to infer global supply chain interdependencies in the context of COVID-19
Si Ying Zhang
Journal of Economics and Business, 2021, vol. 115, issue C
While the COVID-19 pandemic has exposed the vulnerabilities of “just-in-time” international supply chains and is set to further accelerate their reconfigurations, very little is known about how global production networks are linked together at the firm level, making it difficult to assess where the dependencies lie. In this study, we use firm-level data on customer-supplier relationships from over 170 economies and network analysis tools to map global supply chain dependencies and shed light on the complex interconnections that facilitated the propagation of COVID-19’s economic impact. Leveraging the early virus outbreak in China as an exogenous shock, we first study the equity price responses of China-linked firms to news of virus-induced lockdowns, finding that markets priced in significant transmission effects of the coronavirus shock across global supply chains. Then, we dive deeper into the production networks of three globalised industries, whose unique and convoluted network structures may serve as a reminder that “reshoring” supply chains is easier said than done.
Keywords: Event study; Stock returns; Supply chain; Network analysis; COVID-19 (search for similar items in EconPapers)
JEL-codes: F14 G14 G15 L14 L23 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:jebusi:v:115:y:2021:i:c:s0148619520304185
Access Statistics for this article
Journal of Economics and Business is currently edited by Emanuele Bajo and Moritz Ritter
More articles in Journal of Economics and Business from Elsevier
Bibliographic data for series maintained by Catherine Liu ().