The transfer of risk taking along the supply chain *

Manh Cuong Nguyen, Viet Anh Dang, Tri Tri Nguyen

Research output: Contribution to journalArticlepeer-review

Abstract

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 languageEnglish
JournalReview of Quantitative Finance and Accounting
DOIs
Publication statusPublished - 24 Aug 2023

Keywords

  • Risk taking
  • customer-supplier relationships
  • supply chain
  • bargaining power

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