Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/319327 
Year of Publication: 
2024
Citation: 
[Journal:] European Financial Management [ISSN:] 1468-036X [Volume:] 31 [Issue:] 2 [Publisher:] Wiley [Place:] Hoboken, NJ [Year:] 2024 [Pages:] 786-818
Publisher: 
Wiley, Hoboken, NJ
Abstract: 
We study the role of inventory in corporate resilience to Covid‐19 in 2020, which triggered exogenous shocks to consumer demand, commodity prices and supply chains. Unexpected drops in consumer demand and commodity prices increase the costs of inventory. Conversely, inventory holdings can buffer against supply disruptions. Empirically, US firms with higher inventory experienced more negative stock market responses early in the crisis due to falling consumer demand. However, since May 2020, inventory has become valuable as a hedge against supply disruptions, improving firm performance. During Covid‐19, unlike other crises, inventory played a unique role as a hedge against supply disruptions.
Subjects: 
commodity price shock
consumer demand shock
Covid‐19
inventory
supply chain disruption
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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