Date of Degree

9-2019

Document Type

Dissertation

Degree Name

Ph.D.

Program

Business

Advisor

Mingcherng Deng

Committee Members

Masako Darrough

Kalin Kolev

Karl Lang

Subject Categories

Accounting | Business Administration, Management, and Operations | Business and Corporate Communications | Corporate Finance | Operations and Supply Chain Management

Keywords

Supply chain, suppliers, customers, bargaining power, Nash bargaining, adjustment costs, cost stickiness, SFAS 14 disclosures, industry concentration, competition, negotiation

Abstract

Given the essential role of supply chains in the economy, furthering our understanding of the interactions between trade partners is important. In this paper, I study the relation between cost stickiness and bargaining power over supply chain partners. I document evidence consistent with the argument that firms wield supply chain bargaining power to avoid cost stickiness by shifting high adjustment costs onto their trade partners. In particular, I show that the level of SG&A and COGS stickiness is negatively associated with firms’ bargaining power over their suppliers and customers. My results are robust to using industry competition as an alternative measure of supply chain bargaining power, therefore alleviating concerns about endogeneity. Moreover, my results are robust to lead-and-lag tests, alternative measures of supply chain bargaining power, and among subsamples examined in prior studies. Overall, my study offers insights into whether and how supply chain relations influence firms’ cost stickiness behavior.

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