Inter-firm linkages and the wealth effects of financial distress along the supply chain☆

Hertzel, Michael G.; Li, Zhi; Officer, Micah S.; Rodgers, Kimberly J.

doi:10.1016/j.jfineco.2007.01.005

Cited by 625 publications

(389 citation statements)

References 25 publications

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“…Recent studies have found evidence of comovement in stock returns within production networks (Cohen and Frazzini 2008;Hertzel et al 2008;Menzly and Ozbas 2010;Ahern 2012;Boone and Ivanov 2012;Kelly, Lustig, and Van Nieuwerburgh 2013). Our results, which emphasize the importance of input complementarity and switching costs, provide a foundation for this comovement.…”

Section: Quarterly Journal Of Economicssupporting

confidence: 74%

Input Specificity and the Propagation of Idiosyncratic Shocks in Production Networks *

Barrot

Sauvagnat

2016

The Quarterly Journal of Economics

900

397

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This article examines whether firm-level idiosyncratic shocks propagate in production networks. We identify idiosyncratic shocks with the occurrence of natural disasters. We find that affected suppliers impose substantial output losses on their customers, especially when they produce specific inputs. These output losses translate into significant market value losses, and they spill over to other suppliers. Our point estimates are economically large, suggesting that input specificity is an important determinant of the propagation of idiosyncratic shocks in the economy. JEL Codes: L14, E23, E32.

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Section: Quarterly Journal Of Economicssupporting

confidence: 74%

Input Specificity and the Propagation of Idiosyncratic Shocks in Production Networks *

Barrot

Sauvagnat

2016

The Quarterly Journal of Economics

900

397

View full text Add to dashboard Cite

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“…4 Given the complexity of interbank linkages, counterparty risk is even more worrisome for financial institutions. In the spirit of our model, whether other banks will fail in the wake of the 4 Empirically the counterparty contagion hypothesis is supported by Hertzel et al (2008), Jorion and Zhang (2009), Brunnermeier (2009), Chakrabarty and Zhang (2012, and Iyer and Peydro (2011), among others. As Helwege (2009) points out, government bailout is necessary if counterparty contagion is a major contagion channel for financial firms.…”

mentioning

confidence: 81%

Bank capital, interbank contagion, and bailout policy

Tian

Yang

Zhang

2013

Journal of Banking & Finance

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“…Prior research documented the role of supply chains in bankruptcy waves (Hertzel et al 2008, Houston et al 2016, Kolay et al 2016. Researchers looked at supply chain network characteristics, such as network centrality (Wu andBirge 2014, Yang andZhang 2016), customer concentration (Cen et al 2017, Campello andGao 2017), and network distance from the event firm (Wu 2015).…”

Section: Supply Chains and Asset Pricingmentioning

confidence: 99%

Introduction to the Special Issue on Research at the Interface of Finance, Operations, and Risk Management (iFORM): Recent Contributions and Future Directions

Babich

Kouvelis

2018

M&SOM

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Abstract. Interface of finance, operations, and risk management (iFORM) is a relatively new research area dealing with timely, complex, and boundary-spanning issues in a variety of settings from start-ups to global enterprises. iFORM research addresses ways to better integrate physical, financial, and informational flows by combining the operational choices of the firm with its financial decisions, and merging information flows between the firm and its customers and suppliers with informational flows between the firm and its investors. We report on the main research themes of the recent iFORM research, based on, and going beyond, papers that appeared in the Manufacturing and Service Operations Management iFORM special issue. We highlight the main emerging contributions in the area. Among the most frequently addressed issues in current research include the following: supply chain finance, such as trade credit and buyer-intermediated finance and their effects on supply chain performance; agency problems, such as risk shifting and managerial short-termism and their influence on operational decisions; contracting between the firm and its investors and how it alters contracting with supply chain partners; and supply risk management in the form of dealing with commodity price fluctuations and supplier performance issues. We suggest four promising directions of future iFORM research: supply chain finance, integrated risk management, start-up and entrepreneurial financing, and asset pricing with supply chains.

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Inter-firm linkages and the wealth effects of financial distress along the supply chain☆

Cited by 625 publications

References 25 publications

Input Specificity and the Propagation of Idiosyncratic Shocks in Production Networks *

Input Specificity and the Propagation of Idiosyncratic Shocks in Production Networks *

Bank capital, interbank contagion, and bailout policy

Introduction to the Special Issue on Research at the Interface of Finance, Operations, and Risk Management (iFORM): Recent Contributions and Future Directions

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