Till Death Do Us Part: Relationship shocks, supply chain organization and firm performance

Timothy Destefano, Keiko Ito, Richard Kneller and Jonathan Timmis

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: Within modern economies firms are embedded in often complex supply chains, creating strong interdependencies between firms. But what happens when these supply chains are disrupted, what changes does this bring about? We answer these questions, focusing on what happens when connections between companies exogenously break because of the unexpected death of the CEO within one of the firms. We rely on detailed data from the TSR which provides firm-level measures of start and exit dates of CEOs along with buyer-supplier linkages. This data is matched to detailed statistics on Japanese firms which enables us to identify the effects of such leadership changes on supplier networks and subsequent performance. We find that such deaths promote the churning of suppliers but not of customers of the firm and therefore that these shocks propagate towards upstream firms through the supply chain. There is also evidence that this affects the short-term performance of indirectly affected firms as the shock propagates backwards along the supply chain.

Pages: 50 pages
Date: 2023-07
New Economics Papers: this item is included in nep-bec, nep-eff and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.rieti.go.jp/jp/publications/dp/23e049.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:23049

Access Statistics for this paper

More papers in Discussion papers from Research Institute of Economy, Trade and Industry (RIETI) Contact information at EDIRC.
Bibliographic data for series maintained by TANIMOTO, Toko ().