I already wrote about different effect supply chain disruptions can have on a focal company and its stakeholders. Now I found another interesting article dealing with the impact of different disasters on different industries within the supply chain.Method
The authors (Altay and Ramirez) use a exploratory empirical study to analyze the effect of over 3’500 historic natural disasters within over 150’000 firm-years.
From the literature analysis three hypothesis were generated:
- H1: A firm’s financial leverage increases in response to a disaster.
- H2: A firm’s TAT (Total Asset Turnover) will decrease in response to a disaster.
- H3: A firmâ€™s OCF (Operating Cash Flow) will increase in response to a disaster.
Two disaster databases were used to gather the relevant data about the disruptions. Three proxies for the overall effect of the disaster are used: ratio of damage over GDP, affected people by the disaster (per capita) and a composite measure based on the disaster count, affected population, the death toll and the damage.
These were then correlated with the financial leverage, the TAT and the OCF.
Continue reading "Impact of Disasters on different Sectors"
Originally posted by email@example.com (Daniel Stengel) at http://scrmblog.com/archives/269-Impact-of-Disasters-on-different-Sectors.html