Abstract
© 2023, [Springer]. The attached document (embargoed until 19/07/2024) is an author produced version of a paper published in Review of Quantitative Finance and Accounting uploaded in accordance with the publisher’s self-archiving policy. The final published version (version of record) is available online at the link. Some minor differences between this version and the final published version may remain. We suggest you refer to the final published version should you wish to cite from it.
We show that suppliers’ risk taking is positively influenced by that of their major customers. This result is consistent with the notion that when major customers take more risk to enhance their bargaining power and rent extraction ability, suppliers may respond by also engaging in more risk taking to improve their bargaining positions. Further cross-sectional analysis shows that the transfer of risk taking along the supply chain becomes stronger when suppliers and customers have more comparable bargaining power and when the former have greater risk-taking capacities. Our findings are robust to a series of tests addressing endogeneity concerns.
We show that suppliers’ risk taking is positively influenced by that of their major customers. This result is consistent with the notion that when major customers take more risk to enhance their bargaining power and rent extraction ability, suppliers may respond by also engaging in more risk taking to improve their bargaining positions. Further cross-sectional analysis shows that the transfer of risk taking along the supply chain becomes stronger when suppliers and customers have more comparable bargaining power and when the former have greater risk-taking capacities. Our findings are robust to a series of tests addressing endogeneity concerns.
| Original language | English |
|---|---|
| Pages (from-to) | 1341–1378 |
| Journal | Review of Quantitative Finance and Accounting |
| Volume | 61 |
| Issue number | 2023 |
| DOIs | |
| Publication status | Published - 24 Aug 2023 |