Model
Digital Document
Publisher
Florida Atlantic University
Description
On March 11, 2011 there was an underwater earthquake off the Japanese coastline, and the resulting
tsunami impacted Japanese firms. That impact also rippled through supply chains across the globe.
The electronics industry was significantly impacted because Japan plays a prominent role in the global
electronics industry. This study investigates the impact of the disruption caused by the Tsunami in the
global electronic industry supply chain. Specifically, Bloomberg financial data was analyzed to
understand the relationships involved in this supply chain, and then used to investigate the impact on
key companies in that chain. The study linked companies in Japan, Taiwan, and the United States, and
analyzed the impact of the Tsunami on their immediate and short term stock prices. Results showed
the expected immediate negative impact on the stock prices of the companies involved. But it was
interesting to note an increased dampening effect was evident as the distance from the location of
impact increased. Further, the study also identified a surprising second negative impact on stock prices
of the companies in the supply chain. We propose that it is due to temporal memory of the markets to
disruptive events. Further research directions are proposed.
tsunami impacted Japanese firms. That impact also rippled through supply chains across the globe.
The electronics industry was significantly impacted because Japan plays a prominent role in the global
electronics industry. This study investigates the impact of the disruption caused by the Tsunami in the
global electronic industry supply chain. Specifically, Bloomberg financial data was analyzed to
understand the relationships involved in this supply chain, and then used to investigate the impact on
key companies in that chain. The study linked companies in Japan, Taiwan, and the United States, and
analyzed the impact of the Tsunami on their immediate and short term stock prices. Results showed
the expected immediate negative impact on the stock prices of the companies involved. But it was
interesting to note an increased dampening effect was evident as the distance from the location of
impact increased. Further, the study also identified a surprising second negative impact on stock prices
of the companies in the supply chain. We propose that it is due to temporal memory of the markets to
disruptive events. Further research directions are proposed.
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