Supply Chain Risk: Changes in Supplier Composition and Vertical Integration

Supply Chain Risk: Changes in Supplier Composition and Vertical Integration

Nuri Ersahin, Mariassunta Giannetti, Ruidi Huang

Series number :

Serial Number: 
848/2022

Date posted :

September 27 2022

Last revised :

December 19 2023
SSRN Share

Keywords

  • Supply chains; nearshoring; fragmentation; textual analysis; topic modeling; vertical integration; M&As

Using textual analysis of earnings conference calls, we quantify firms’ supply chain risk and explore how firms react when supply chain risk increases. We show that firms with supply chains that span across continents, multinationals, and firms with fewer suppliers of an input face higher supply chain risk. In addition, firms exhibit high supply chain risk when their suppliers also do so.

Firms manage supply chain risk by establishing relationships with closer and domestic suppliers and with suppliers that are industry leaders and by vertically integrating, but they continue to work with suppliers in other continents.

 

 

Published in

Published in: 
Description: 
Journal of International Economics, Forthcoming

Authors

Real name:
Nuri Ersahin
Real name:
Ruidi Huang