The Contribution of Third-Party Indices in Assessing Global Operational Risks;*

Abstract

In the face of global uncertainties and a growing reliance on third‐party indices to obtain a snapshot of a country's operational risks, we explore the related questions: How accurately do third‐party indices capture a country's operational risk, and how does the operational risk of the country, in turn, affect the volume of its import and export supply chains? We examine these questions by empirically investigating 81 member countries of the World Trade Organization (WTO) using archival data collected from UN agencies, independent think tanks, the WTO, and the Economist Intelligence Unit. We use seven third‐party indices to gauge a country's internal environment and map those indices to corresponding country‐specific operational risks to further understand the consequent effects of those operational risks on trading volume. Results provide strong evidence for the use of certain third‐party indices in assessing operational risk. In addition, operational risks are found to negatively affect the volume of import and export supply chains, albeit in varying degrees.

Managing Financially Distressed Suppliers: An Exploratory Study

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An optimization framework for improving supplier delivery performance

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“…The second article in the special topic forum (Bhattacharyya, Datta and Offodile 2010), “The Contribution of Third‐Party Indices in Assessing Global Operational Risks,” uses archival data collected from UN agencies, independent think tanks, the WTO, and the Economist Intelligence Unit (EIU) to empirically examine the internal environment, operational risk and trading volumes of 81 member countries of the WTO. Seven third‐party indices are used to assess a country's internal environment.…”