Climate Change and Adaptation in Global Supply-Chain Networks

By Nora Pankratz, Christopher M. Schiller. Social Science Research Network, 2019

240 citations recorded by the source corpus.

This paper examines how physical climate exposure affects firm performance and global supply chains. We document that heat at supplier locations reduces the operating income of suppliers and their customers. Further, customers respond to perceived changes in suppliers’ exposure: when suppliers’ realized exposure exceeds ex ante expectations, customers are 7% more likely to terminate supplier relationships. Consistent with experience-based learning, this effect increases with signal strength and repetition and decreases with country-level climate adaptation. Subsequent replacement suppliers show a lower expected and realized but similar projected heat exposure. We find similar results for suppliers' exposure to floods.

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/1d3808f3834673c1cec4c1e17621fabd33e5f3f2

Citations in the corpus

• Investor Rewards to Climate Responsibility: Stock-Price Responses to the Opposite Shocks of the 2016 and 2020 U.S. Elections (2021, unknown): “See Gillan, Koch, and Starks (2021) for a survey of the literature on shareholder value effects of CSR/ESG. 6 Ilhan, Sautner, and Vilkov (2021), and Pankratz and Schiller (2019).7 Our paper complements this new strand of research by showing that investor rewards to climate-responsible…”