The impact of international sanctions on supply chains in the portuguese metalworking industry

Abstract

Increasingly complex and globalised environments present significant challenges for organisations operating within interconnected supply chains. This is particularly relevant for firms exposed to international sanctions, which can act as major sources of disruption. While existing research has predominantly focused on the macroeconomic effects of sanctions, limited attention has been given to firm-level operational experiences and responses. Addressing this gap, this study examines the impact of international sanctions on supply chain dynamics and operational performance in the Portuguese metalworking industry. Grounded in Resource Dependence Theory and Institutional Theory, the study proposes a conceptual model in which exposure to international sanctions, dependency on external suppliers, and institutional pressure act as antecedents of supply chain disruption. Supply chain disruption is further analysed in relation to operational performance and the adoption of mitigation strategies. A quantitative research design was employed, based on primary data collected through a structured questionnaire administered to firms in the Portuguese metalworking industry, resulting in 46 valid responses. The data were analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM) to assess both measurement and structural relationships in an exploratory context. The results indicate that exposure to international sanctions has a positive and statistically significant effect on supply chain disruption. In turn, supply chain disruption significantly influences both the adoption of mitigation strategies and operational performance. Additionally, mitigation strategies were found to have a positive and significant effect on operational performance. In contrast, dependency on external suppliers and institutional pressure were not found to have statistically significant effects on supply chain disruption. This study contributes to the literature by providing firm-level empirical evidence within a highly internationalised and externally dependent industry. It highlights the role of supply chain disruption as a key mechanism through which external shocks affect organisational outcomes and underscores the importance of proactive mitigation strategies in enhancing operational stability. The findings also offer practical implications for managers operating in geopolitically uncertain environments, emphasising the need for effective supply chain risk management and diversification strategies.