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Supply chain disruption recovery in the evolving crisis—Evidence from the early COVID-19 outbreak in China

Author

Listed:
  • Fan, Di
  • Lin, Yongjia
  • Fu, Xiaoqing (Maggie)
  • Yeung, Andy C.L.
  • Shi, Xuanyi

Abstract

The speed of recovery from supply chain disruption has been identified as the predominant factor in building a resilient supply chain. However, COVID-19 as an example of an evolving crisis may challenge this assumption. Infection risk concerns may influence production resumption decision-making because any incidents of infection may lead to further shutdowns of production lines and undermine firms’ long-term cash flows. Sampling 244 production resumption announcements by Chinese manufacturers in the early COVID-19 crisis (February–March 2020), our analysis shows that, generally, investors react positively to production resumptions. However, investors perceived the earlier production resumptions were higher risk (indicated by declined stock price). Such concerns were exacerbated by more locally confirmed cases of COVID-19 but were less salient for manufacturers with high debts (liquidity pressure). This study calls for a reassessment of the current disruption management mindset in response to new evolving crises (e.g., COVID-19) and provides theoretical, practical, and policy implications for building resilient supply chains.

Suggested Citation

  • Fan, Di & Lin, Yongjia & Fu, Xiaoqing (Maggie) & Yeung, Andy C.L. & Shi, Xuanyi, 2023. "Supply chain disruption recovery in the evolving crisis—Evidence from the early COVID-19 outbreak in China," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 176(C).
    • Handle: RePEc:eee:transe:v:176:y:2023:i:c:s1366554523001904
    DOI: 10.1016/j.tre.2023.103202
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