The impact of the pandemic-induced semiconductor shortage on working capital management of U.S industries

  • Johannes Borges Kuckertz (Student)

Student thesis: Master's Thesis


This paper investigates the impacts of the pandemic-induced chip shortage on working capital management of U.S. industries. The methodology involves measuring the sensitivity of publicly traded firms’ returns to the semiconductor industry through a 5-factor Fama and French model including the PHLX Semiconductor Index. Through obtained β values, industries were categorized into treated and control groups based on the average sensitivity of their respective firms to the chip industry. Aiming to isolate the effect of the semiconductor shortage, this study makes use of a Generalized Synthetic Control Method with Two-way Fixed Effects and Bootstrapping procedures. Working Capital Management is assessed through Days Sales Outstanding, Days Inventory Outstanding, Days Payable Outstanding, and Cash Conversion Cycle. Additionally, the respective turnover metrics of these items are also examined. Evidence is found supporting a decrease in DSO and an increase in Recevable Turnover, indicating a shift towards profitability and liquidity by impacted firms. A strategic increase in inventory can also be inferred from the obtained results, amidst the uncertain length of the shortage and increased consumer demand from 2021 onward. Firm size is to some extent relevant for the definition of credit policies of larger firms and shows evidence of expansive inventory capacity for SMEs. Furthermore, increased Cash Conversion Cycles can be observed for middle-sized firms after the shock. The findings contribute to the literature studying working capital management, the impact of the pandemic, and the consequent supply chain constraints on financial management.
Date of Award25 Jan 2024
Original languageEnglish
Awarding Institution
  • Universidade Católica Portuguesa
SupervisorGeraldo Cerqueiro (Supervisor)


  • Working capital management
  • Pandemic
  • Semiconductor shortage
  • Generalized synthetic control method
  • U.S. supply chain disruption


  • Mestrado em Finanças

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