Supply chain security certification and operational performance: The role of upstream complexity

Supply chain security (SCS) incidents increasingly cause financial losses to manufacturing facilities and logistics service providers. Thus, supply certification can have implications for production economics, particularly importing firms who rely on a smooth flow across country borders. However, it largely remains unknown regarding how such could influence firm's operational performance. To this end, we empirically examine whether the adoption of Customs-Trade Partnership Against Terrorism (C-TPAT) certification, initiated by U.S. Customs Border Protection (CBP), improve performance in adopter firms. This study draws upon signaling theory investigate value C-TPAT publicly-traded importer firms' analyzing longitudinal data properly-matched sample-control groups. The come from multiple sources: public announcements News Retrieval Service database, import lading records, Standard & Poor's COMPUSTAT database. Employing coarsened exact matching (CEM) method difference-in-difference (DID) analysis, find that certified importers better than non-certified importers. We also level upstream complexity ( detail , dynamic spatial complexity) enhances derived certification. sheds light management standard is attributed non-process mechanism (not due process improvements) enabled effectiveness incorporating complexities. Our findings important theoretical practical economics studies. • leads increased firm Signaling helps explain adopting benefit Increased effects last as long two years. Upstream