Mitigating the negative financial effects of extreme weather events through supply chain analytics

Xiong, Yangchun ORCID: 0000-0001-7183-8917, Han, Runyue, Ma, Xiaoxuan, Lam, Hugo KS ORCID: 0000-0002-4674-6145 and Lyons, Andrew ORCID: 0000-0003-3105-1567 (2025) Mitigating the negative financial effects of extreme weather events through supply chain analytics. International Journal of Production Economics, 279. p. 109441. ISSN 0925-5273

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Official URL: https://doi.org/10.1016/j.ijpe.2024.109441

Abstract

Despite extensive discussions on the value of integrating big data analytics into supply chains, or supply chain analytics (SCA) for short, it remains unclear whether SCA can effectively help firms mitigate the negative financial impacts of extreme weather events. To address this important research question, we first employed the event study methodology to quantify extreme weather events' financial effects in terms of abnormal stock returns. Then, we compared the difference in abnormal stock returns between firms that have adopted SCA and matched control firms without SCA adoption. Our event study results indicate that, although these events affected firms' stock returns negatively, the effects were less severe for firms with (rather than without) SCA adoption. Furthermore, firms having more stable innovation outputs reaped greater benefits from SCA in the extreme weather context. Conversely, firms facing more unstable market demands benefited more from SCA in the extreme weather context. Overall, our research demonstrates the mitigating role played by SCA during extreme weather events but also reveals how this mitigating role is contingent on the firm's internal and external operating uncertainties.

Item Type:	Article
Uncontrolled Keywords:	35 Commerce, Management, Tourism and Services, 3502 Banking, Finance and Investment, 46 Information and Computing Sciences, 3509 Transportation, Logistics and Supply Chains, 4609 Information Systems
Divisions:	Faculty of Humanities and Social Sciences Faculty of Humanities and Social Sciences > School of Management
Depositing User:	Symplectic Admin
Date Deposited:	22 Oct 2024 07:07
Last Modified:	13 Jan 2025 21:35
DOI:	10.1016/j.ijpe.2024.109441
Related URLs:	Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3185650