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Managerial ability and supply chain power

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  • Wali Ullah, G M
  • Luo, Juan
  • Yawson, Alfred

Abstract

This paper investigates how major customer firms, managed by highly capable managers, can gain bargaining power over their suppliers. Our results document a positive association between managerial ability and the supply chain power a major customer firm holds over its suppliers. The results are robust to endogeneity concerns, tested through two-stage least squares (2SLS) regressions and difference-in-differences estimates surrounding forced CEO turnovers. We find the positive association to be stronger for durable goods manufacturers and higher ability managers engaged in socially responsible activities and corporate innovation. We provide evidence that higher-ability managers use their enhanced bargaining power to secure greater supplier trade credit.

Suggested Citation

  • Wali Ullah, G M & Luo, Juan & Yawson, Alfred, 2024. "Managerial ability and supply chain power," Journal of Contemporary Accounting and Economics, Elsevier, vol. 20(2).
    • Handle: RePEc:eee:jocaae:v:20:y:2024:i:2:s1815566924000146
    DOI: 10.1016/j.jcae.2024.100414
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    More about this item

    Keywords

    Managerial ability; Supply chain power; Major customer; Corporate innovation; Corporate social responsibility;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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