More or less: The impact of suppliers' locations on the recovery from the COVID-19 pandemic

Abstract

This paper tests how quickly firms recover from the shock caused by the COVID-19 pandemic under different sourcing strategies. Our findings indicate that firms with geographically concentrated suppliers experience slower recovery compared to those with geographically dispersed suppliers following the outbreak of the COVID-19 pandemic. Further analysis also reveals that firms with geographically concentrated suppliers recover more rapidly if their suppliers are less affected by the COVID-19 pandemic, if they maintain long-term supplier relationships, or if they hold higher levels of cash reserves.