Navigating geopolitical risks: Implications for global supply chain management

Dmytro Rasshyvalov; Yevhenii Portnov; Tetiana Sigaieva; Oleksandr Alboshchii; Oleksandr Rozumnyi

doi:10.31893/multirev.2024spe017

Keywords:

geopolitical risks

international logistics

economic sanctions

transport systems

sustainability of supply

transnational logistics

Abstract

In today's changing world, understanding the impact of geopolitical risks on global supply chains is key to ensuring their efficiency and sustainability. Geopolitical events of recent years in the form of international conflicts, political changes, European economic sanctions and even natural disasters have a significant impact on global transport networks, causing various challenges and obstacles. The purpose of the article is to analyze the impact of such geopolitical risks on global supply chains, identify the main problems faced by companies, and develop strategies to overcome them. The article highlights the results of a complex study, which includes the analysis of academic sources, international reports, economic indicators, technological trends and regional features. It found that disruptions in supply chains due to geopolitical risks can have serious consequences, from increased costs and delivery delays to production shutdowns. The study points to the need to implement flexible and adaptive management strategies for intercontinental logistics systems that allow a quick response to changes in the geopolitical space. The key area of research is effective management of global supply chains in conditions of geopolitical uncertainty, which requires the integration of various approaches and technologies. The obtained results provide a valuable tool for strategic planning and decision-making in the field of transnational logistics restructuring, helping commercial companies to prepare and adapt to potential geopolitical changes.
References
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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

How to cite

Rasshyvalov, D., Portnov, Y., Sigaieva, T., Alboshchii, O., & Rozumnyi, O. (2024). Navigating geopolitical risks: Implications for global supply chain management. Multidisciplinary Reviews, 7, 2024spe017. https://doi.org/10.31893/multirev.2024spe017

[1] Adra, S., Gao, Y., Huang, J., & Yuan, J. (2023). Geopolitical risk and corporate payout policy. International Review of Financial Analysis, 87. https://doi.org/10.1016/j.irfa.2023.102613

[2] Alsagr, N., Cumming, D.J., Davis, J.G., & Sewaid, A. (2023). Geopolitical risk and crowdfunding performance. Journal of International Financial Markets, Institutions and Money, 85. https://doi.org/10.1016/j.intfin.2023.101766

[3] Bednarski, L., Roscoe, S., Blome, C., & Schleper, M. C. (2024). Geopolitical disruptions in global supply chains: a state-of-the-art literature review. Production Planning & Control, 1-27. https://doi.org/10.1080/09537287.2023.2286283

[4] Będowska-Sójka, B., Demir, E., & Zaremba, A. (2022). Hedging Geopolitical Risks with Different Asset Classes: A Focus on the Russian Invasion of Ukraine. Finance Research Letters, 50. https://doi.org/10.1016/j.frl.2022.103192

[5] Bernards, N., Campbell-Verduyn, M., & Rodima-Taylor, D. (2022). The veil of transparency: Blockchain and sustainability governance in global supply chains. Environment and Planning C: Politics and Space. https://doi.org/10.1177/23996544221142763

[6] Blessley, M., & Mudambi, S. M. (2022). A Trade War and a Pandemic: Disruption and Resilience in the Food Bank Supply Chain. Industrial Marketing Management, 102, 58-73. https://doi.org/10.1016/j.indmarman.2022.01.002

[7] Bouri, E., Gupta, R., & Vo, X.V. (2022). Jumps in Geopolitical Risk and the Cryptocurrency Market: The Singularity of Bitcoin. Defense and Peace Economics, 33(2), 150-161. https://doi.org/10.1080/10242694.2020.1848285

[8] Bussy, A., & Zheng, H. (2023). Responses of FDI to geopolitical risks: The role of governance, information, and technology. International Business Review, 32(4). https://doi.org/10.1016/j.ibusrev.2023.102136

[9] Caldara, D., & Iacoviell, M. (2022). Measuring Geopolitical Risk. American Economic Review, 112(4), 1194-1225.https://doi.org/10.1257/aer.20191823

[10] Dahan, Y., Lerner, H., & Milman-Sivan, F. (2023). Shared Responsibility and Labor Rights in Global Supply Chains. Journal of Business Ethics, 182(4), 1025-1040. https://doi.org/10.1007/s10551-021-04988-w

[11] Dauvergne, P. (2022). Is artificial intelligence greening global supply chains? Exposing the political economy of environmental costs. Review of International Political Economy, 29(3), 696-718. https://doi.org/10.1080/09692290.2020.1814381

[12] Dutta, A., & Dutta, P. (2022). Geopolitical risk and renewable energy asset prices: Implications for sustainable development. Renewable Energy, 196, 518-525. https://doi.org/10.1016/j.renene.2022.07.029

[13] Ekinci, E., Mangla, S.K., Kazancoglu, Y., Sarma, P.R.S., Sezer, M.D., & Ozbiltekin-Pala, M. (2022). Resilience and complexity measurement for energy efficient global supply chains in disruptive events. Technological Forecasting and Social Change, 179. https://doi.org/10.1016/j.techfore.2022.121634

[14] Flouros, F., Pistikou, V., & Plakandaras, V. (2022). Geopolitical Risk as a Determinant of Renewable Energy Investments. Energies, 15(4). https://doi.org/10.3390/en15041498

[15] Free, C., & Hecimovic, A. (2021). Global supply chains after COVID-19: the end of the road for neoliberal globalization? Accounting, Auditing and Accountability Journal, 34(1), 58-84. https://doi.org/10.1108/AAAJ-06-2020-4634

[16] Ghadge, A., Duck, A., Er, M., & Caldwell, N. (2021). Deceptive counterfeit risk in global supply chains. Supply Chain Forum, 22(2), 87-99. https://doi.org/10.1080/16258312.2021.1908844

[17] Ghosh, S. (2022). Geopolitical risk, economic growth, economic uncertainty and international inbound tourism: an Indian Illustration. Review of Economics and Political Science, 7(1), 2-21. https://doi.org/10.1108/REPS-07-2020-0081

[18] Gong, X., & Xu, J. (2022). Geopolitical risk and dynamic connectedness between commodity markets. Energy Economics, 110. https://doi.org/10.1016/j.eneco.2022.106028

[19] Hertzel, M., Peng, J., Wu, J., & Zhang, Y. (2023). Global supply chains and cross-border financing. Production and Operations Management, 32(9), 2885-2901. https://doi.org/10.1111/poms.14014

[20] Kazancoglu, Y., Ekinci, E., Mangla, S.K., Sezer, M.D., & Ozbiltekin-Pala, M. (2023). Impact of epidemic outbreaks (COVID-19) on global supply chains: A case of trade between Turkey and China. Socio-Economic Planning Sciences, 85. https://doi.org/10.1016/j.seps.2022.101494

[21] Kotenko, S., Nitsenko, V., Hanzhurenko, I., & Havrysh, V. (2020). The mathematical modeling stages of combining the carriage of goods for indefinite, fuzzy and stochastic parameters. International Journal of Integrated Engineering, 12(7), 173-180. https://doi.org/10.30880/ijie.2020.12.07.019

[22] Levytska, S., Pershko, L., Akimova, L., Akimov, O., Havrilenko, K., & Kucherovskii, O. (2022). A risk-oriented approach in the system of internal auditing of the subjects of financial monitoring. International Journal of Applied Economics, Finance and Accounting, 14(2), 194-206. https://doi.org/10.33094/ijaefa.v14i2.715

[23] Long, H., Demir, E., Będowska-Sójka, B., Zaremba, A., & Shahzad, S. (2022). Is geopolitical risk priced in the cross-section of cryptocurrency returns? Finance Research Letters, 49. https://doi.org/10.1016/j.frl.2022.103131

[24] Meehan, T. (2024). Navigating Geopolitical Risks in Business & Supply Chains. LinkedIn Corporation. https://www.linkedin.com/pulse/navigating-geopolitical-risks-business-supply-chains-tom-meehan-cfi-qwlre/

[25] Monge, M., Romero Rojo, M.F., & Gil-Alana, L.A. (2023). The impact of geopolitical risk on the behavior of oil prices and freight rates. Energy, 269. https://doi.org/10.1016/j.energy.2023.126779

[26] Ngoc, N. M., Viet, D. T., Hoang Tien, N., Hiep, P. M., Anh, N. T., Anh, L. D. H., Truong, N. T., Anh, N., Trung, L. Q., Dung, V. T. P., & Thao, L. (2022). Russia-Ukraine war and risks to global supply chains. International Journal of Mechanical Engineering, 7(6), 633-640.

[27] Nguyen, D.N., Nguyen, T.T.H., Nguyen, T.T., Nguyen, X., Do, T.K.T., & Ngo, H.N. (2022). The effect of supply chain finance on supply chain risk, supply chain risk resilience, and performance of Vietnam SMEs in global supply chain. Uncertain Supply Chain Management, 10(1), 225-238. https://doi.org/10.5267/j.uscm.2021.9.005

[28] Perevozova, I., Malynka, O., Nitsenko, V., Kryshtal, H., Kostiuk, V., & Mishchenko, V. (2023). Analysis of trends in mortgage lending in the agricultural sector of ukraine. Journal of Risk and Financial Management, 16(5). https://doi.org/10.3390/jrfm16050255

[29] Phan, D.H.B., Tran, V.T., & Iyke, B.N. (2022). Geopolitical risk and bank stability. Finance Research Letters, 46. https://doi.org/10.1016/j.frl.2021.102453

[30] Rao, S., Koirala, S., Aldhawyan, S., & Corbet, S. (2023). Geopolitical risk and M&A: The role of national governance institutions. Economics Letters, 225. https://doi.org/10.1016/j.econlet.2023.111062

[31] Sharma, A., Kumar, V., Borah, S.B., & Adhikary, A. (2022). Complexity in a multinational enterprise's global supply chain and its international business performance: A bane or a boon? Journal of International Business Studies, 53(5), 850-878. https://doi.org/10.1057/s41267-021-00497-0

[32] Sodhi, M. S., Tang, C. S. & Willenson E. T. (2021). Research Opportunities in Preparing Supply Chains of Essential Goods for Future Pandemics. International Journal of Production Research, 61(8), 2416-2431. https://doi.org/10.1080/00207543.2021.1884310

[33] Sohag, K., Hammoudeh, S., Elsayed, A.H., Mariev, O., & Safonova, Y. (2022). Do geopolitical events transmit opportunity or threat to green markets? Decomposed measures of geopolitical risks. Energy Economics, 111. https://doi.org/10.1016/j.eneco.2022.106068

[34] Srivastava, M., & Rogers, H. (2022). Managing global supply chain risks: effects of the industry sector. International Journal of Logistics Research and Applications, 25(7), 1091-1114. https://doi.org/10.1080/13675567.2021.1873925

[35] Supply Chain Management (2022). Marketandmarkets Report. https://www.marketsandmarkets.com/Market-Reports/supply-chain-management-market-190997554.html. Accessed on March 10, 2024.

[36] Tiwari, S., Sharma, P., Choi, T.M., & Lim, A. (2023). Blockchain and third-party logistics for global supply chain operations: Stakeholders' perspectives and decision roadmap. Transportation Research Part E: Logistics and Transportation Review, 170. https://doi.org/10.1016/j.tre.2022.103012

[37] Um, J., & Han, N. (2021). Understanding the relationships between global supply chain risk and supply chain resilience: the role of mitigating strategies. Supply Chain Management, 26(2), 240-255. https://doi.org/10.1108/SCM-06-2020-0248

[38] Xu, X., Sethi, S.P., Chung, S.H., & Choi, T.M. (2023). Reforming global supply chain management under pandemics: The GREAT-3Rs framework. Production and Operations Management, 32(2), 524-546. https://doi.org/10.1111/poms.13885

[39] Zayed, N. M., Edeh, F. O., Darwish, S., Islam, K. M. A., Kryshtal, H., Nitsenko, V., & Stanislavyk, O. (2022). Human resource skill adjustment in service sector: Predicting dynamic capability in post COVID-19 work environment. Journal of Risk and Financial Management, 15(9). https://doi.org/10.3390/jrfm15090402

Abstract

References

How to cite