Working hard for long‐distance relationships: Geographic proximity and relationship‐specific investments
| Autor: | Kershen Huang, Chi Zhang, Chenguang Shang |
|---|---|
| Rok vydání: | 2021 |
| Předmět: |
Economics and Econometrics
050208 finance Association (object-oriented programming) Supply chain 05 social sciences Enterprise value Principal–agent problem Geographic proximity Accounting 0502 economics and business Business 050207 economics Dimension (data warehouse) Finance Industrial organization |
| Zdroj: | Financial Management. 50:985-1011 |
| ISSN: | 1755-053X 0046-3892 |
| DOI: | 10.1111/fima.12338 |
| Popis: | Suppliers that are farther away from their customers make more relationship-specific investments (RSI). This association is more pronounced when it is less costly for the customer to switch to alternative suppliers and when the supplier operates in relatively opaque information environments. Using the introduction of new airline routes as an exogenous shock to the distance between supply chain partners, we show that the relation between supplier RSI and distance may be causal. We also provide evidence that suppliers with larger RSI are better able to maintain long-distance business relationships and are associated with higher firm value. These findings suggest an important dimension of supplier commitment: Suppliers use RSI as a signal of their willingness to fulfill on-going implicit claims. |
| Databáze: | OpenAIRE |
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