Reactions to Supply Chain Disruptions: Evidence from German Firms

Cevat Giray Aksoy, Andreas Baur, Lisandra Flach, Beata Javorcik

Key Messages

  • Almost 90 percent of German manufacturing firms have adopted concrete changes in their sourcing strategies in response to supply chain disruptions
  • Increased stockpiling (68 percent) and diversification of suppliers (65 percent) are the most frequently adopted measures to strengthen the resilience of supply chains
  • Many firms plan to adopt further changes within a year: one in two manufacturers intends to increase its number of suppliers
  • Policymakers should support firms in their diversification efforts by strengthening the multilateral trade order and further lowering trade barriers
Abstract

Since the outbreak of the Covid-19 pandemic, the configuration of international supply chains has received increased public attention. Pandemic-related disruptions in production and transportation have led to questions about the reliability of international production networks. Moreover, the war in Ukraine and the associated sanctions against Russia have cast a new light on the geopolitical significance of economic interdependencies with autocratic regimes. How do firms react to these developments, and have they already adjusted their sourcing strategies? In this policy brief, we present the results from a representative survey of more than 4,000 firms in Germany, providing insights into how companies have responded to supply chain disruptions and which priorities they are setting for the future.

Citation

Cevat Giray Aksoy, Andreas Baur, Lisandra Flach and Beata Javorcik: “Corporate Taxes Reduce Investment: New Evidence from Germany,” EconPol Policy Brief 45 October 2022.