The Role of Inventory in Firm Resilience to the Covid‐19 Pandemic
Date
Authors
Supervisor
Item type
Journal Article
Degree name
Journal Title
Journal ISSN
Volume Title
Publisher
Wiley
Abstract
We study the role of inventory in corporate resilience to Covid-19 in 2020, which triggered exogenous shocks to consumer demand, commodity prices and supply chains. Unexpected drops in consumer demand and commodity prices increase the costs of inventory. Conversely, inventory holdings can buffer against supply disruptions. Empirically, US firms with higher inventory experienced more negative stock market responses early in the crisis due to falling consumer demand. However, since May 2020, inventory has become valuable as a hedge against supply disruptions, improving firm performance. During Covid-19, unlike other crises, inventory played a unique role as a hedge against supply disruptions.Description
Source
European Financial Management, ISSN: 1354-7798 (Print); 1468-036X (Online), Wiley. doi: 10.1111/eufm.12517
Publisher's version
Rights statement
© 2024 The Author(s). European Financial Management published by John Wiley & Sons Ltd. This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.