Author:
Liu Jiangxia,Sarkar Sourish,Kumar Sanjay,Jin Zhenhu
Abstract
Purpose
The purpose of this paper is to explore the stock market impact of supply chain disruptions for public companies in Japan. The impact in the USA and Japan are also compared.
Design/methodology/approach
Using event study on a data set comprising of disruptions announced by Japanese and US companies during year 2000-2013, the authors measure the stock price reaction to supply chain disruptions.
Findings
The study finds that the Japanese companies, in an 11-day window around disruption announcement, witness an average abnormal return of −0.61 percent, which is statistically significant. In comparison to the USA, this stock decline is qualitatively smaller, yet statistically indifferent. The abnormal return is found significant in the two days before disruption announcement. However, a follow-up study with a refined data set (where the event date is the earlier of the announcement or disruption date) does not find any significant abnormal return prior to the event date. This difference from US market suggests the possibility of insider trading. Factors such as book-to-market ratio, industry type, and market capitalization did not affect the stock decline.
Research limitations/implications
The research is limited to a data set from Japan and the USA. Further generalization of findings may need studies focused on other countries.
Practical implications
The results are of interest for supply chain managers. The results should also help global investors in making investment decisions.
Originality/value
Most supply chain disruptions management research is focused on companies in western countries. The paper is the first to test the impact of supply chain disruptions in Japan.
Subject
Strategy and Management,General Business, Management and Accounting
Reference54 articles.
1. Financial markets versus institutions in European countries: influence of culture and other national characteristics;International Business Review,2010
2. Managing corporate performance: investigating the relationship between corporate social responsibility and financial performance in emerging markets;International Journal of Productivity and Performance Management,2010
3. Product reliability and firm value: the experience of American and Japanese automakers 1973-1992;Journal of Political Economy,1996
4. The impact of shocks to exchange rates and oil prices on U.S. sales of American and Japanese automakers;Japan and the World Economy,1999
5. Bhatla, G., Lane, C. and Wain, A. (2013), “Building resilience in supply chains”, World Economic Forum, available at: www3.weforum.org/docs/WEF_RRN_MO_BuildingResilienceSupplyChains_Report_2013.pdf (accessed November 22, 2017).
Cited by
12 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献