Assessing the extended impacts of supply chain disruptions on firms: An empirical study

This paper empirically examines the effects of supply chain disruptions on firms' performance by applying a new quantitative measure of a disruption's impact that was adapted from the systems resilience literature. This new measure captures the total amount of loss suffered by a firm, and it supports comparing the relative performance of disrupted firms over time. To illustrate the value of the approach, both the operating performance and the stock market reaction are analyzed for more than 300 firms that suffered a supply chain disruption between 2005 and 2014. After validating the results against the reported behaviors from previous analyses, the new impact measure is explicitly used to show that different sized firms and different industry sectors exhibit varying amounts of loss, not just in the short term, following the announcement of the disruption, but also over an extended period of time after the disruption occurs.

Automated summary

This paper empirically examines the effects of supply chain disruptions on firms' performance using a new quantitative measure of a disruption's impact, demonstrating that different sized firms and industry sectors exhibit varying amounts of loss in the short term and over an extended period of time after a disruption occurs.