Global Supply Chain Pressures, Financial Flexibility, and Firm Efficiency

This study explores the importance of financial flexibility in promoting firm efficiency during periods of high global supply chain pressures. Utilizing a sample of US firms, we show that financial flexibility can dampen the impact of higher GSCP on firm efficiency. Our findings indicate that the negative impact of GSCP on firm efficiency reduces by 22% - 39% when the firm has higher financial flexibility compared to when the firm has lower financial flexibility. This percentage increases when more than one financial flexibility measure is adopted. This result is largely homogenous across both good-producing and service-providing industries