IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v259y2026ics0165176525005919.html

Does nature dependence drive firms’ supply chain risk?

Author

Listed:
  • Hoang, Huy Viet
  • Vu, Giang Thi Minh

Abstract

Using the fixed effect estimator on a U.S. firm dataset from 2012 to 2021, this study reveals that greater dependence on natural resources significantly increases supply chain risk. The mechanism analysis identifies that supply chain risk intensifies when firms face greater volatility in input material costs and maintain lower inventory reserves, supporting the inventory management channel. Additional evidence shows that this unfavorable impact is amplified following major global shocks, namely the 2016 Paris Agreement and the 2018 U.S.–China trade war. These findings collectively underscore the need for enhanced input diversification, inventory resilience, and adaptive strategies in managing nature-related risks.

Suggested Citation

  • Hoang, Huy Viet & Vu, Giang Thi Minh, 2026. "Does nature dependence drive firms’ supply chain risk?," Economics Letters, Elsevier, vol. 259(C).
    • Handle: RePEc:eee:ecolet:v:259:y:2026:i:c:s0165176525005919
    DOI: 10.1016/j.econlet.2025.112754
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176525005919
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2025.112754?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Arthur Lewbel, 2012. "Using Heteroscedasticity to Identify and Estimate Mismeasured and Endogenous Regressor Models," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 30(1), pages 67-80.
    2. Seongtae Kim & Stephan M. Wagner & Claudia Colicchia, 2019. "The Impact of Supplier Sustainability Risk on Shareholder Value," Journal of Supply Chain Management, Institute for Supply Management, vol. 55(1), pages 71-87, January.
    3. Lyu, Yizhen, 2025. "Government accounting supervision and corporate supply chain risk," Finance Research Letters, Elsevier, vol. 74(C).
    4. Vahid Nooraie, S. & Parast, Mahour Mellat, 2016. "Mitigating supply chain disruptions through the assessment of trade-offs among risks, costs and investments in capabilities," International Journal of Production Economics, Elsevier, vol. 171(P1), pages 8-21.
    5. Griliches, Zvi & Hausman, Jerry A., 1986. "Errors in variables in panel data," Journal of Econometrics, Elsevier, vol. 31(1), pages 93-118, February.
    6. Blome, Constantin & Schoenherr, Tobias, 2011. "Supply chain risk management in financial crises--A multiple case-study approach," International Journal of Production Economics, Elsevier, vol. 134(1), pages 43-57, November.
    7. Kristien Coucke & Leo Sleuwaegen, 2008. "Offshoring as a survival strategy: evidence from manufacturing firms in Belgium," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(8), pages 1261-1277, December.
    8. Niu, Niu & Zhang, Bin & Song, Yanwu & Boateng, Agyenim, 2025. "Climate policy uncertainty and ESG performance of energy firms: The moderating effect of cloud computing technology," International Review of Financial Analysis, Elsevier, vol. 108(PA).
    9. Fan, Yun & Chen, Xiaoli & Guo, Xin & Bai, Keke, 2025. "How does digital transformation improve supply chain efficiency? Evidence from a-share listed companies in China," Finance Research Letters, Elsevier, vol. 86(PD).
    10. Pol Antràs & Teresa C. Fort & Felix Tintelnot, 2017. "The Margins of Global Sourcing: Theory and Evidence from US Firms," American Economic Review, American Economic Association, vol. 107(9), pages 2514-2564, September.
    11. Wafik Hachicha & Manel Elmsalmi, 2014. "An integrated approach based-structural modeling for risk prioritization in supply network management," Journal of Risk Research, Taylor & Francis Journals, vol. 17(10), pages 1301-1324, November.
    12. Ersahin, Nuri & Giannetti, Mariassunta & Huang, Ruidi, 2024. "Supply chain risk: Changes in supplier composition and vertical integration," Journal of International Economics, Elsevier, vol. 147(C).
    13. Huang, Yi & Lin, Chen & Liu, Sibo & Tang, Heiwai, 2023. "Trade networks and firm value: Evidence from the U.S.-China trade war," Journal of International Economics, Elsevier, vol. 145(C).
    14. Holweg, Matthias & Reichhart, Andreas & Hong, Eui, 2011. "On risk and cost in global sourcing," International Journal of Production Economics, Elsevier, vol. 131(1), pages 333-341, May.
    15. Huynh, Nhan & Le, Quynh Nga, 2025. "From chain to capital: Supply chain risks and working capital management," Economics Letters, Elsevier, vol. 247(C).
    16. Tübbicke Stefan, 2022. "Entropy Balancing for Continuous Treatments," Journal of Econometric Methods, De Gruyter, vol. 11(1), pages 71-89, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tran, Thanh Tat & Hoang, Khanh & Ngo, Thanh & Nguyen, Thang Xuan & Tran, Hien Thi Thu, 2025. "How does biodiversity risk exposure affect corporate regulatory intensity?," Finance Research Letters, Elsevier, vol. 86(PB).
    2. Laura Alfaro & Mariya Brussevich & Camelia Minoiu & Andrea F. Presbitero, 2025. "Bank Financing of Global Supply Chains," NBER Working Papers 33754, National Bureau of Economic Research, Inc.
    3. Dominick Bartelme & Yuriy Gorodnichenko, 2015. "Linkages and Economic Development," NBER Working Papers 21251, National Bureau of Economic Research, Inc.
    4. Tamara Fioroni & Andrea Mario Lavezzi & Giovanni Trovato, 2025. "Organized Crime, Corruption, and Economic Growth," Journal of Regional Science, Wiley Blackwell, vol. 65(2), pages 535-560, March.
    5. André Luiz Romano & Luís Miguel D. F. Ferreira & Sandra Sofia F. S. Caeiro, 2021. "Modelling Sustainability Risk in the Brazilian Cosmetics Industry," Sustainability, MDPI, vol. 13(24), pages 1-26, December.
    6. Yang, Liyuan & Zikos, Vasileios, 2023. "Mental health and smoking behavior," Economic Modelling, Elsevier, vol. 126(C).
    7. Carballo, Jeronimo & Graziano, Alejandro G. & Schaur, Georg & Martincus, Christian Volpe, 2025. "Import processing and trade costs," Journal of International Economics, Elsevier, vol. 154(C).
    8. Meijer, Erik & Spierdijk, Laura & Wansbeek, Tom, 2017. "Consistent estimation of linear panel data models with measurement error," Journal of Econometrics, Elsevier, vol. 200(2), pages 169-180.
    9. Kauppi, Katri & Longoni, Annachiara & Caniato, Federico & Kuula, Markku, 2016. "Managing country disruption risks and improving operational performance: risk management along integrated supply chains," International Journal of Production Economics, Elsevier, vol. 182(C), pages 484-495.
    10. Hamidou Jawara & Rainer Thiele, 2021. "The Nutrient-Income Elasticity in Ultra-Poor Households: Evidence from Kenya," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(6), pages 1795-1819, December.
    11. Huang, Yongming & Li, Xin & Liu, Changwei, 2025. "The Supply chain spillovers of Pilot Free Trade Zones on GVC upgrading of Chinese firms," Structural Change and Economic Dynamics, Elsevier, vol. 75(C), pages 439-450.
    12. Hung Quang Bui & Khanh Hoang & Huy Viet Hoang & Anh Ngoc Quang Huynh & Giang Thi Minh Vu & Thao Duong Phuong Pham, 2025. "National Innovation Systems and Corporate Intangible Investment as a Driver of Sustainable Development: A Cross‐Country Study," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(6), pages 9226-9244, December.
    13. Ronald B. Davies & Rodolphe Desbordes, 2015. "Greenfield FDI and skill upgrading: A polarized issue," Canadian Journal of Economics, Canadian Economics Association, vol. 48(1), pages 207-244, February.
    14. Luo, Changyuan & Wang, Ning, 2025. "U.S.-China trade frictions and supply chain reconstruction: Perspective from indirect links," Journal of International Money and Finance, Elsevier, vol. 151(C).
    15. Ignacia Cuevas & Thomas Bourany & Gustavo González, 2024. "Supply Chain Uncertainty and Diversification," Working Papers Central Bank of Chile 1018, Central Bank of Chile.
    16. Kamguia, Brice & Tadadjeu, Sosson & Ndoya, Hermann & Djeunankan, Ronald, 2025. "Assessing the nexus between industrialization and inclusive green growth in Africa. The critical role of energy efficiency," Ecological Economics, Elsevier, vol. 233(C).
    17. Chen, Hong-Yi & Lee, Alice C. & Lee, Cheng-Few, 2015. "Alternative errors-in-variables models and their applications in finance research," The Quarterly Review of Economics and Finance, Elsevier, vol. 58(C), pages 213-227.
    18. Huynh, Nhan & Le, Quynh Nga, 2025. "From chain to capital: Supply chain risks and working capital management," Economics Letters, Elsevier, vol. 247(C).
    19. Gospodinov, Nikolay & Komunjer, Ivana & Ng, Serena, 2017. "Simulated minimum distance estimation of dynamic models with errors-in-variables," Journal of Econometrics, Elsevier, vol. 200(2), pages 181-193.
    20. Amulya Gurtu & Jestin Johny, 2021. "Supply Chain Risk Management: Literature Review," Risks, MDPI, vol. 9(1), pages 1-16, January.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:259:y:2026:i:c:s0165176525005919. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.