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Commodity price risk, supply chain, and lending

Author

Listed:
  • Degl’Innocenti, Marta
  • Santilli, Gianluca
  • Sclip, Alex
  • Zhou, Si

Abstract

This paper examines the effects of recurring commodity price shocks on supply chains, focusing on oil price fluctuations. We find that affected firms receive less liquidity from suppliers while extending more liquidity to customers to retain them, which further aggravates their financial conditions. We also find that firms extend more trade credit to customers when the lock-in effect is stronger that is when relationships with suppliers are more stable and long-term, and when they are more innovative. Finally, our results indicate that banks impose higher spreads on firms with greater exposure to oil price shocks. Overall, our findings suggest that firms exposed to oil price shocks face greater trade credit liquidity issues and more expensive access to the debt market.

Suggested Citation

  • Degl’Innocenti, Marta & Santilli, Gianluca & Sclip, Alex & Zhou, Si, 2025. "Commodity price risk, supply chain, and lending," Energy Economics, Elsevier, vol. 150(C).
    • Handle: RePEc:eee:eneeco:v:150:y:2025:i:c:s0140988325006358
    DOI: 10.1016/j.eneco.2025.108808
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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G3 - Financial Economics - - Corporate Finance and Governance
    • D2 - Microeconomics - - Production and Organizations
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production

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