From chain to capital: Supply chain risks and working capital management
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Le, QN
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Abstract
This study empirically examines the influence of supply chain risks on working capital management. By employing a text-based measure of firm-specific supply chain risks and a large sample of US listed firms, this study uncovers a strong positive correlation between supply chain risk exposure and net working capital, with an increase of approximately 6 % annually. Firms strategically adjust by increasing inventory and accounts receivable while reducing accounts payable to buffer against disruptions. This adaptive response is particularly evident in firms facing financial constraints, higher international exposure, and those in high-risk sectors, offering critical insights into enhancing resilience and operational efficiency.
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Economics Letters
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247
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© 2024 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
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Supply chains
Transportation, logistics and supply chains
Economics
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Huynh, N; Le, QN, From chain to capital: Supply chain risks and working capital management, Economics Letters, 2025, 247, pp. 112100