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Navigating global uncertainty: Do foreign national directors protect US firms from supply chain disruptions?

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Titel: Navigating global uncertainty: Do foreign national directors protect US firms from supply chain disruptions?
Autoren: D'Lima, Rohan1 (AUTHOR), Rava, Ariel2 (AUTHOR), Subasi, Musa3 (AUTHOR) msubasi@umd.edu
Quelle: Contemporary Accounting Research. Jun2025, Vol. 42 Issue 2, p1298-1330. 33p.
Schlagwörter: *SUPPLY chain disruptions, *BOARDS of directors, *ECONOMIC policy, *SUPPLY chains, ECONOMIC uncertainty
Abstract (English): We examine whether foreign national directors (FNDs) on US corporate boards help their firms mitigate the adverse effects of economic policy uncertainty (EPU) shocks originating from the directors' home countries. Using a comprehensive data set of US manufacturing firms' international supply chain relationships from 2003 to 2019, we find that EPU spikes in supplier countries lead to significant declines in aggregate US imports as well as in buyer firms' inventory purchases, sales, and market valuation. However, firms with FNDs from the affected countries are better able to mitigate these negative impacts. Cross‐sectional analyses reveal that the beneficial role of FNDs is more pronounced in firms with limited operational slack, greater difficulty accessing information about supplier countries, and higher financial constraints. Robust to a battery of sensitivity tests, our findings underscore the importance of FNDs on corporate boards during times of increased global uncertainty, especially for firms heavily reliant on foreign suppliers, and inform the debate on board diversity and supply chain resilience amid economic policy‐driven uncertainties. [ABSTRACT FROM AUTHOR]
Abstract (French): Résumé: Faire face à l'incertitude mondiale : les administrateurs étrangers protègent‐ils les entreprises états‐uniennes des perturbations de la chaine d'approvisionnement? Cette étude examine si la présence d'administrateurs étrangers (AE) au sein des conseils des entreprises états‐uniennes contribue à atténuer les effets délétères des chocs provoqués par l'incertitude des politiques économiques (IPE) dans les pays d'origine des administrateurs. En analysant un ensemble de données exhaustif concernant les relations de la chaine d'approvisionnement internationale des entreprises manufacturières aux États‐Unis entre 2003 et 2019, les auteurs constatent que les périodes d'IPE dans les pays fournisseurs entrainent des baisses significatives des importations états‐uniennes globales, ainsi qu'une diminution des niveaux d'acquisitions des stocks, des ventes et de l'évaluation boursière des entreprises acheteuses. Toutefois, les entreprises recrutant des AE dans les pays touchés sont mieux à même d'atténuer ces répercussions néfastes. Les analyses transversales révèlent que le rôle des AE est particulièrement bénéfique dans les entreprises qui disposent d'une marge de manœuvre opérationnelle limitée, qui rencontrent de plus grande difficulté à accéder aux informations sur les pays fournisseurs et qui subissent des contraintes financières plus importantes. Résistant à une série de tests de conformité, les constatations des auteurs soulignent l'importance des IPE au sein des conseils des entreprises en période d'incertitude mondiale accrue, notamment pour les entreprises fortement dépendantes de fournisseurs étrangers. Ces résultats alimentent aussi le débat sur la diversité des conseils d'administration et la résilience de la chaine d'approvisionnement dans un contexte d'incertitudes liées à la politique économique. [ABSTRACT FROM AUTHOR]
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Datenbank: Business Source Index
Beschreibung
Abstract:We examine whether foreign national directors (FNDs) on US corporate boards help their firms mitigate the adverse effects of economic policy uncertainty (EPU) shocks originating from the directors' home countries. Using a comprehensive data set of US manufacturing firms' international supply chain relationships from 2003 to 2019, we find that EPU spikes in supplier countries lead to significant declines in aggregate US imports as well as in buyer firms' inventory purchases, sales, and market valuation. However, firms with FNDs from the affected countries are better able to mitigate these negative impacts. Cross‐sectional analyses reveal that the beneficial role of FNDs is more pronounced in firms with limited operational slack, greater difficulty accessing information about supplier countries, and higher financial constraints. Robust to a battery of sensitivity tests, our findings underscore the importance of FNDs on corporate boards during times of increased global uncertainty, especially for firms heavily reliant on foreign suppliers, and inform the debate on board diversity and supply chain resilience amid economic policy‐driven uncertainties. [ABSTRACT FROM AUTHOR]
ISSN:08239150
DOI:10.1111/1911-3846.13040