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The transfer of risk taking along the supply chain

Author

Listed:
  • Manh Cuong Nguyen

    (University of East London
    Ho Chi Minh City Open University)

  • Viet Anh Dang

    (University of Manchester)

  • Tri Tri Nguyen

    (University of Roehampton
    University of Economics Ho Chi Minh City)

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.

Suggested Citation

  • Manh Cuong Nguyen & Viet Anh Dang & Tri Tri Nguyen, 2023. "The transfer of risk taking along the supply chain," Review of Quantitative Finance and Accounting, Springer, vol. 61(4), pages 1341-1378, November.
    • Handle: RePEc:kap:rqfnac:v:61:y:2023:i:4:d:10.1007_s11156-023-01186-9
    DOI: 10.1007/s11156-023-01186-9
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    More about this item

    Keywords

    Risk taking; Customer–supplier relationships; Supply chain; Bargaining power;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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