What led you down that research path originally?
RH: I ended up publishing two papers—one in the Journal of Financial Economics and one in the Journal of International Economics—to quantify supply chain risks, investigate the strategies firms adopt to mitigate these risks and study the effect of trade credit in maintaining supply chain stability.
What do you find compelling about this area of research?
RH: I’m most compelled by the real-world relevance of supply chain disruptions and the financial systems that support global production. Supply chains are the backbone of modern production, and disruptions can have cascading effects on firms’ operations. As the old saying goes, the chain is only as strong as the weakest link. By studying how firms assess and manage supply chain risks, I can contribute to a more robust understanding of supply chain interdependencies and how firms can better navigate these risks. Additionally, I find exploring the role of trade credit as a stabilizing force within these networks fascinating because it reveals how financial relationships can buffer firms against disruptions, allowing them to maintain operational continuity.
What kind of outcomes would you like to affect with your research findings?
RH: I hope my research will provide actionable insights that help firms build more resilient and adaptable supply chains. By quantifying the risks associated with global supply chains and showing how firms manage these risks through strategic financial decisions, my work could help firms strengthen their supplier networks and mitigate the impact of supply chain disruptions. My work on trade credit, in particular, highlights how financial tools can be used to stabilize production networks during disruptions. I also want my research to inform policymakers about the broader economic implications of supply chain vulnerabilities and the importance of facilitating policies that enable firms to manage these risks effectively.
What are the key takeaways from your research?
RH: One of the key takeaways from my research on trade credit is that this particular financial tool could serve as a “glue” that helps firms maintain relationships within production networks during disruptions. Also, having a measure that quantifies the risks firms face in global supply chains is crucial, especially in today’s interconnected and volatile global economy. My research highlights the importance of firms managing supply chain risk by diversifying suppliers and establishing closer, more reliable relationships with domestic suppliers. This is critical to ensuring firms can adapt quickly to external shocks and continue their operations without significant losses.
What’s next for your research efforts?
RH: Moving forward, I plan to expand my research on supply chain resilience, focusing on how firms can better anticipate and prepare for future disruptions, such as those caused by tariffs and geopolitical events. Tariffs especially have introduced new complexities into global supply chains, as firms must navigate the shifting costs of imports and exports and adapt their sourcing and pricing strategies accordingly.
I aim to investigate how firms, depending on their product types and supply chain structures, respond to these challenges. This includes exploring how firms adjust their sourcing decisions, evaluating the trade-offs between cost optimization and resilience, and understanding the importance of product innovation. Ultimately, my goal is to provide insights on how to adapt and thrive in a world of growing trade barriers and supply chain volatility.
