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Customer-Country diversification and inventory efficiency: Comparative evidence from the manufacturing sector during the pre-pandemic and the COVID-19 pandemic periods

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  • Fisher Ke, Jian-yu
  • Otto, James
  • Han, Chaodong

Abstract

This study empirically examines the impact of geographic customer diversification on inventory efficiency and proposes a customer-country diversification strategy as a central element of U.S. manufacturing firms’ effort to transform their global supply chains in the aftermath of the COVID-19 pandemic. Using industry-level data during the pre-pandemic period (2003–2018) and the COVID-19 pandemic, this study finds that a geographically diversified customer base significantly reduced inventory efficiency during the pre-pandemic period, but increased inventory efficiency during the COVID-19 pandemic. Our finding suggests that U.S. manufacturing firms may be able to reduce negative impacts on inventory in a global pandemic and achieve greater inventory efficiency if they can target global customer bases with demand characteristics less correlated with U.S. domestic demand.

Suggested Citation

  • Fisher Ke, Jian-yu & Otto, James & Han, Chaodong, 2022. "Customer-Country diversification and inventory efficiency: Comparative evidence from the manufacturing sector during the pre-pandemic and the COVID-19 pandemic periods," Journal of Business Research, Elsevier, vol. 148(C), pages 292-303.
    • Handle: RePEc:eee:jbrese:v:148:y:2022:i:c:p:292-303
    DOI: 10.1016/j.jbusres.2022.04.066
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    References listed on IDEAS

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