Coronavirus disease outbreak and supply chain disruption: Evidence from Taiwanese firms in China

Chia-Hsien Tang; Chih-Yu Chin; Yen-Hsien Lee

doi:10.1016/j.ribaf.2020.101355

Coronavirus disease outbreak and supply chain disruption: Evidence from Taiwanese firms in China

Res Int Bus Finance. 2021 Apr:56:101355. doi: 10.1016/j.ribaf.2020.101355. Epub 2020 Nov 21.

Authors

Chia-Hsien Tang¹, Chih-Yu Chin², Yen-Hsien Lee³

Affiliations

¹ College of Accounting and Auditing, Guangxi University of Finance and Economics, 100 Mingxiu West Road, Nanning, Guangxi, 530003, PR China.
² Department of Information Management, Chung Yuan Christian University, Taiwan.
³ Department of Finance, Chung Yuan Christian University, Taiwan.

Abstract

This study applies an empirical analysis to examine whether supply chain disruption is caused by the outbreak of the coronavirus disease (COVID-19) that was first reported in Wuhan, China, on December 31, 2019. The study's findings indicate a link between the COVID-19 outbreak and the disruption of logistics and supply chains along with negative cumulative abnormal returns within Taiwanese firms manufacturing products in China and marketing them globally. This is the first study to examine the outbreak of the COVID-19 and the disruption of the supply chain and its effect on the stock market. The empirical results provide insights for business management in reconsidering their global supply chain strategies for the risk of disruption caused by similar epidemics occurs in the future.

Keywords: Abnormal stock returns; Coronavirus disease (COVID-19); Manufacturing and marketing.