Does supplier concentration matter to investors during the COVID-19 crisis: evidence from China?

Financial Innovation

Research

Jacqueline Wenjie Wang¹  Shaolong Tang¹  Jack S. C. Poon²  Louis T. W. Cheng³ 

[1] Division of Business and Management, Beijing Normal University-Hong Kong Baptist University, United International College, Zhuhai, China;School of Accounting and Finance of the Hong Kong Polytechnic University, Hong Kong, China;School of Business, The Hang Seng University of Hong Kong, Hong Kong, China;

关键词: COVID-19;    Supplier concentration;    Supplier disclosure;    Stock price effect;    Industry neutral portfolio;   

DOI  :  10.1186/s40854-022-00391-0

 received in 2021-05-17, accepted in 2022-09-16,  发布年份 2022

来源: Springer

【 摘 要 】

The literature shows that investor attention to customer–supplier disclosure increases when suppliers’ information arrival is anticipated. Due to the widespread of city lockdowns in China and the implementation of social distancing to control the COVID-19 pandemic, investor attention to potential disruption of the supply chain spikes, leading to a price devaluation for firms with high supplier concentration risk. We find that a higher degree of supplier concentration is related to more serious stock price declines over the short-term and medium-term windows right after the Wuhan lockdown. This result lends support to the argument that the concentration risk of suppliers is a significant consideration for China stock market investors, especially under the potential financial distress at the firm level induced by the COVID-19 crisis.

【 授权许可】

CC BY   
© The Author(s) 2022

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