| Paper Number | KCB-WP-2023-002 |
|---|---|
| Title | Do Managers Stockpile Excess Inventory after Natural Disasters? |
| Title(Other) | Seunghyun Cho ; Boochun Jung ; Felipe Bastos Gurgel Silva ; Choong-Yuel Yoo |
| Author | Seunghyun Cho ; Boochun Jung ; Felipe Bastos Gurgel Silva ; Choong-Yuel Yoo |
| Publisher | KAIST College of Business |
| Abstract | We examine whether managers stockpile excess inventory after experiencing natural disaster(s). Using a sample of 39 major natural disasters in the U.S. between 1993 and 2018, we document that firms located within a disaster area stockpile excess inventory after experiencing a disaster. The effect is stronger when a disaster is more catastrophic, suggesting that managers experiencing more salient events tend to stockpile excess inventories to a larger extent. We further show that the effect is more pronounced for firms with higher stockout costs and lower labor adjustment costs. The decision to temporarily hoard inventory after the disaster negatively affects firm value and leads to poor firm performance. Overall, our findings highlight the importance of managers’ subjective risk perceptions in inventory-holding decisions. |
| Full-Text | * Full-Text 다운로드는 경영대학 학생에게만 제공되고 있습니다. |