World Economic Forum uses data from Osiris to show how natural disasters affect global supply chains

An article by the World Economic Forum (WEF), in collaboration with VoxEU and using supply chain data from Osiris, shows how intertwined production networks make economic shocks more likely to be amplified and spread from country to country. The findings also show that access to global opportunities and alternative partners can make companies more resilient to these disaster shocks.

Citing a projected rise in the numbers of natural disasters due to climate change and seismic trends, the article describes the fragility of global production networks when it comes to natural disasters. For example, the effects of the Great Eastern Japan Earthquake could be felt by other Japanese firms that were not directly impacted by the disaster. Furthermore, the earthquake had a negative effect on overseas affiliates of these Japanese firms, showing how a local natural disaster could impact supply chains on an international scale.

The investigation found that firms with partners that were connected to each other were more likely to circulate and amplify the negative effects of disaster shocks. The WEF and VoxEU extended the global focus of the research to look at the negative effects of global supply chains in general, not only those between affiliated firms.

Their findings supported the idea that the supply chains that had overseas partners or suppliers, or partners that were not linked to each other, made the involved firms more resilient when faced with negative economic shocks. They concluded that, "While international economic links may be feared to conduct and amplify global shocks, our study illustrates how international networks can protect firms during turbulent times."

How the research was done

This investigation into disaster shock propagation included data found in:

• financial reports
• news articles and websites
• Osiris's global data set of mostly listed company information including supply chain and ownership information

Osiris has information on listed, and major unlisted and delisted companies globally. In addition to financial reports, the data found in Osiris includes ownership information, directors and other contacts, market research, company-related news, and more.