Negative default dependencies: Do automotive suppliers benefit from their competitors' default?

Wagner, Stephan M. ; Bode, Christoph ; Koziol, Philipp

Document Type: Conference or workshop publication
Year of publication: 2009
Book title: Operations Research Proceedings 2008 : selected papers of the annual International Conference of the German Operations Research Society (GOR), University of Augsburg, September 3 - 5, 2008
The title of a journal, publication series: Operations Research Proceedings
Page range: 233-238
Date of the conference: Sept. 3-5, 2008
Publisher: Fleischmann, Bernhard
Place of publication: Berlin [u.a.]
Publishing house: Springer
ISBN: 978-3-642-00141-3 , 978-3-642-00142-0
Publication language: English
Institution: Business School > Stiftungslehrstuhl für Procurement (Bode 2014-)
Subject: 650 Management
Abstract: Given the criticality of the supplier network and the increasing number of supplier defaults, automotive OEMs are well advised to actively manage their supplier networks, consider supply risks, and avoid negative and exploit positive consequences of supplier defaults. We aim to extend the research on supplier defaults along two dimensions: First, with a few exceptions, previous studies have focused on the default consequences of individual suppliers. However, since suppliers do not operate in isolation, their financial situation is often interlinked. We argue that default dependence (also default correlation) exists in supplier networks and that OEMs should manage the entire network as a group and consider interdependencies among suppliers. Second, all studies that have considered default dependencies have exclusively modeled positive dependence, i.e., they have assumed that, given two suppliers 1 and 2, the default of supplier 2 is positively related to the default of supplier 1. In contrast, we model negative default dependence (i.e. scenarios where supplier 2 benefits from the default of supplier 1).

Dieser Datensatz wurde nicht während einer Tätigkeit an der Universität Mannheim veröffentlicht, dies ist eine Externe Publikation.

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