Work

Global Sourcing and Firm Inventory During the Pandemic

Year: 2025

Type: article

Abstract: Firms hold inventory to manage input shortages and stockout risks. This is particularly true for firms relying on international supply chains and imported inputs. Using a large-scale quarterly government survey of Japanese manufacturing firms (Q1 2015–Q2 2021), we examine firm-level inventory adjustments to supply chain shocks and focus on firms that sourced inputs globally during the pandemic. We find that before the pandemic, relative to firms that purchase inputs only domestically, importing firms tended to have larger inventories of materials and supplies, as well as work-in-process products. After the pandemic, importers significantly and persistently increased their input inventories of materials and intermediate inputs. Our results are robust to various controls, specifications, and subsamples. These results suggest the possibility of a shift from just-in-time to just-in-case production during the pandemic.

Source: Emerging Markets Finance and Trade

DOI: 10.1080/1540496x.2025.2536689

Authors: Hongyong Zhang, Ha Thi Thanh Doan

Institutions: Research Institute of Economy, Trade and Industry, Economic Research Institute for ASEAN and East Asia

Language: English

Topic: Supply Chain Resilience and Risk Management

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: bronze

Funder: Economic Research Institute for ASEAN and East Asia