The effect of supply chain glitches on shareholder wealth

Journal of Operations Management - Tập 21 - Trang 501-522 - 2003
Kevin B. Hendricks1, Vinod R. Singhal2
1Richard Ivey School of Business, The University of Western Ontario, London, Ont., Canada N6A-3K7
2DuPree College of Management, Georgia Institute of Technology, Atlanta, GA 30332, USA

Tóm tắt

Abstract

This paper estimates the shareholder wealth affects of supply chain glitches that resulted in production or shipment delays. The results are based on a sample of 519 glitches announcements made during 1989–2000. Shareholder wealth affects are estimated by computing the abnormal stock returns (actual returns adjusted for industry and market‐wide influences) around the date when information about glitches is publicly announced. Supply chain glitch announcements are associated with an abnormal decrease in shareholder value of 10.28%. Regression analysis is used to identify factors that influence the direction and magnitude of the change in the stock market’s reaction to glitches. We find that larger firms experience a less negative market reaction, and firms with higher growth prospects experience a more negative reaction. There is no difference between the stock market’s reaction to pre‐1995 and post‐1995 glitches, suggesting that the market has always viewed glitches unfavorably. Capital structure (debt–equity ratio) has little impact on the stock market’s reaction to glitches. We also provide descriptive results on how sources of responsibility and reasons for glitches affect shareholder wealth.


Tài liệu tham khảo

10.1287/mnsc.47.10.1326.10260 10.2307/1252119 10.1287/msom.4.3.171.7754 10.1016/0304-405X(90)90006-L Bharadwaj A. Keil M. 2001. The Effects of Information Technology Failures on the Market Value of Firms: An Empirical analysis. Working Paper. Goizeuta School of Business Emory University Atlanta GA. 10.1016/0165-4101(89)90008-6 10.1016/0304-405X(80)90002-1 10.1016/0304-405X(85)90042-X 10.1016/0165-4101(87)90004-8 10.1287/mnsc.42.4.541 10.1287/mnsc.46.8.1032.12029 10.1016/0304-405X(90)90005-K 10.1086/296552 Chopra S. Meindl P. 2001. Supply Chain Management: Strategy Planning and Operation. Prentice‐Hall Upper Saddle River New Jersey. Cotteleer M.J. 2002. Order Lead‐Time Improvement Following Enterprise—IT Implementation: An Empirical Study. Working Paper. Harvard Business School Boston. Davenport T. 1998. Putting the enterprise into the enterprise system? Harvard Business Review July–August 121–131. 10.1287/isre.4.1.1 Edward M.A., 1996, Strategic supply chain capabilities for competitive advantage and firm success, Journal of Business Logistics, 17, 1 Ettlie J.E., 1998, The ERP challenge, Automotive Manufacturing & Production, 6, 16 Evans R. Danks A. 1998. Strategic supply chain management: creating shareholder value by aligning supply chain strategy with business strategy. In: Gattorna J. (Ed.) Strategic Supply Chain Alignment. Gower Aldershot pp. 18–37. 10.1111/j.1540-5915.1999.tb00917.x Fisher M. 1997. What is the right supply chain for your product? Harvard Business Review March–April 105–116. 10.1287/opre.44.1.87 Francis S.J. 2002. The view of supply chain from Wall Street. In: Proceedings of the Presentation Made at the First Annual Supply Network Conference. San Jose California 18 September. 10.1016/S0272-6963(00)00055-3 10.2307/3665021 10.1016/0304-405X(76)90020-9 Gattorna J. 1998. Strategic Supply Chain Alignment. Gower Aldershot pp. 18–37. 10.1287/mnsc.45.1.16 10.2307/41165910 Handfield R.B. Nichols E.L. 1999. Introduction to Supply Chain Management. Prentice‐Hall Upper Saddle River New Jersey. 10.1016/S0272-6963(02)00038-4 10.1287/mnsc.42.3.415 10.1287/mnsc.43.4.422 10.1016/S0272-6963(00)00049-8 10.1016/0272-6963(94)00016-8 10.1080/07421222.2002.11045716 10.1287/mksc.6.4.320 10.1086/296610 10.1016/0304-405X(95)00826-Z 10.1016/0304-405X(76)90026-X 10.1287/mnsc.42.8.1199 10.1111/j.1540-5915.2000.tb00923.x Kuper A. 2002. Hardening vulnerable links in the supply chain. TOTALsupplychain February 2002 1–4. 10.2307/1252015 10.1016/0304-405X(92)90024-R Lederer P., 1988, The effect of cost structure and demand risk in the justification of new technologies, Journal of Manufacturing and Operations Management, 1, 339 10.2307/2329764 10.1287/msom.3.1.51.9994 10.1287/mnsc.43.4.546 10.1287/mnsc.46.5.626.12047 Lewis I., 1997, Logistics and information technology: a coordination perspective, Journal of Business Logistics, 18, 141 10.1016/0304-405X(80)90015-X 10.1111/j.1937-5956.2002.tb00183.x MacKinlay C.A., 1997, The event studies in economics and finance, Journal of Economic Literature, 35, 13 10.1016/0304-405X(85)90006-6 Mentzer J.T. 2001. Supply Chain Management. Sage Thousands Oak California. 10.1287/msom.4.2.99.283 10.1111/j.1540-5915.1998.tb01355.x 10.1111/j.1540-5915.1999.tb00903.x Quinn F. 1999. The payoff potential in supply chain management. In: Achieving Supply Chain Excellence Through Technology Montgomery Research Inc. San Francisco California. 10.1016/S0272-6963(02)00041-4 Raman A. 1997. Module Overview: Coordinating and Managing Supply Chains. Matching Supply and Demand. Harvard Business School Boston MA. Raman A. 1998. Toward finding the perfect match: matching supply and demand in supply chains. In: Gattorna J. (Ed.) Strategic Supply Chain Alignment. Gower Aldershot pp. 171–187. 10.1016/S0272-6963(02)00032-3 Shapiro J.F. 2001. Modeling the Supply Chain. Duxbury Pacific Grove California. 10.1016/S0272-6963(99)00031-5 Simchi‐Levi D. Kaminsky P. Simchi‐Levi E. 2000. Designing and Managing the Supply Chain. McGraw‐Hill New York NY. Skinner D., 1993, The investment opportunity set and accounting procedure choice: preliminary evidence, Journal of Accounting Research, 19, 407 10.2307/2491386 10.1016/0304-405X(79)90011-4 10.1016/0304-405X(92)90029-W 10.1016/0304-405X(94)00817-K 10.1287/isre.12.2.135.9698 Swafford P.M. Ghosh S. Murthy N. 2003. The Antecedents of Supply Chain Agility: Scale Development and Model Testing. Working Paper. DuPree College of Management Atlanta. 10.1287/mnsc.48.8.992.168 Tyndall G. Gopal C. Partsch W. Kamauff J. 1998. Supercharging Supply Chains: New Ways to Increase Value Through Global Operational Excellence. Wiley New York NY. 10.1016/0278-4254(83)90004-2