COVID-19 Webinar Series: COVID-19 and Supply Chain Risk
27 Nov 2020
11:00 AM–12:15 PM (GMT+8)
Tel: (852) 3943 3471 Email: firstname.lastname@example.org
In this seminar we will examine how supply chain activity reflects onto credit risk during different phases of the COVID-19 pandemic, specifically looking at credit default swap (CDS) spreads and US-China supply chain links. The analysis finds considerable effects on credit risk propagation. The CDS spreads of firms with Chinese supply chain partners increased in parallel with the supply chain disruptions of the economic-shutdown period of the pandemic. Furthermore, following the re-opening in China, these spreads decreased as economic activity resumed there. It was also found that the household demand channel is an important driver of this supply chain credit risk behaviour. Supply chain activity resumption alone is insufficient to decrease credit risk in sectors catering to household demand during periods of dampened household spending. Therefore, having a more global customer base can mitigate the effects of shocks to local household demand. While the leverage of a firm and supply chain duration magnified supply chain driven credit risk during the pandemic, cash holdings, growth opportunities, an investment-grade rating, and supply chain network centralisation moderated such effects.
The webinar will be conducted via ZOOM. The meeting ID will be sent to registrants by email.