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Telfer Research Seminar Series - Sachin Modi Wealthier

Do Supply Chain Managers Make the Right Move in Response to Heightened Domestic and Upstream Policy Uncertainty?

Date & Time

April 21, 2023


DMS 4165


Kathy Cunningham

***M.Sc. Students, this event can count towards one of the six mandatory Research Seminars Series needed to attend (MHS6991 or MGT6991).***

Sachin Modi, PhD

This study examines how firms adjust their sourcing decisions due to variations in policy uncertainty and if such adjustments result in performance effects. Specifically, we assess how policy uncertainty influences a focal firm’s decisions to restructure its supply chain along two dimensions: (a) onshoring/offshoring and (b) geopolitical diversification/concentration. The empirical evidence suggests that managers decrease the ratio of onshore suppliers and diversify their supply base geopolitically in response to heightened upstream policy uncertainty affecting the suppliers. However, we do not find evidence of the influence of domestic policy uncertainty on the focal firm’s decision to adjust the structure of its supply base. To provide actionable advice for mitigating adverse effects resulting from policy uncertainty, we also conduct a post-hoc analysis linking supply chain structure to focal firms’ performance. Our results indicate that, consistent with transaction cost economics, firms with more suppliers onshore and a geopolitically concentrated supply base demonstrate superior performance when their suppliers are exposed to heightened policy uncertainty. As such, our investigation reveals that the managerial response of increasing offshoring and diversifying supply bases may be counterproductive. The estimates are robust and identified through several empirical methodologies.

About the Speaker

Sachin Modi is the John F. Connelly Endowed Professor in Management at Villanova University. He received his Ph.D. in Business with a dual major in Operations Management and Decision Sciences from the Kelley School of Sachin Modi Business at Indiana University. Prior to joining Villanova University, he held faculty positions at Wayne State University, Iowa State University, and the University of Toledo. During his career, he also spent multiple years in consulting working at Kanbay Inc. (now a division of Capgemini) and i2 Technologies (now JDA Software Inc.). His research publications have appeared in several leading academic business journals including the Journal of Operations Management, Production, and Operations Management Journal, the Journal of Marketing, the Journal of Business Ethics, the Journal of Business Logistics and the Journal of Supply Chain Management.

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