Effects of Supply Chain Disruption on Stock Prices of the Automobile Industry

›› 2015, Vol. 27 ›› Issue (10): 173-182.

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Effects of Supply Chain Disruption on Stock Prices of the Automobile Industry

Shu Tong¹, Yang Fang¹, Chen Shou¹, Wang Shouyang^1,2, Lai Kin^3,4, Gan Lu⁵

1. Business School, Hunan University, Changsha 410082;
2. Academy of Mathematics and System Science, Chinese Academy of Sciences, Beijing 100190;
3. International Business School, Shanxi Normal University, Xian 710062;
4. Department of Management Sciences, City University of Hong Kong, Hong Kong, Tat Chee Avenue Kowloon;
5. Office of Humanities and Social Sciences, Hunan University, Changsha 410082

Received:2014-08-05 Online:2015-10-31 Published:2015-11-06

Abstract

Abstract:

This paper uses event study to explore Japan's and China's auto industry stock price fluctuations resulting from the 3.11earthquake in Japan. Stock price effects are estimated by computing the abnormal stock returns around the date when the earthquake occurred. Regression analysis is used to identify factors that influence the stock market's reaction to the earthquake. The empirical results show that: The supply chain disruption caused by the earthquake is a significant negative impact on stock prices, and the effect in China is different from that in Japan. The current ratio is not a significant effect on this event, but the enterprises with higher inventory ratio and grass margin ratio can relief the negative impact of the earthquake.

Key words: supply chain disruption, stock abnormal returns, event study, regression analysis

Shu Tong, Yang Fang, Chen Shou, Wang Shouyang, Lai Kin, Gan Lu. Effects of Supply Chain Disruption on Stock Prices of the Automobile Industry[J]. , 2015, 27(10): 173-182.

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Effects of Supply Chain Disruption on Stock Prices of the Automobile Industry

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