Using a panel of Credit Default Swap (CDS) spreads and supply chain links, we observe that both favorable and unfavorable credit shocks propagate through supply chains in the CDS market. Particularly, the three-day cumulative abnormal CDS spread change (CASC) is 63 basis points for firms whose...

We examine how supply chain activity reflects into credit risk during different phases of the COVID-19 pandemic by focusing on CDS spreads and US-China supply chain links. We find considerable effects on credit risk propagation. CDS spreads for firms with China supply chain partners increase...

We provide evidence that the COVID-19 pandemic has incentivized U.S. firms to rebalance the tradeoff between manufacturing cost efficiency and supply chain resilience in their sourcing decisions. Over the past few decades, companies have been outsourcing production to low-cost countries such as...