Your Name, Your Root : The Impact of Supplier CEO’s Long-Term Orientation on the Duration of Supply Chain Relationships

We examine how a supplier CEO’s long-term orientation (LTO), as characterized by Hofstede’s framework of cross-cultural dimensions, affects the duration of customer-supplier relationships. By analyzing the national cultural backgrounds of 707 distinct supplier CEOs from 20 countries based on their surnames in the period of 1992-2017, we find that supplier top managers in national cultures that prioritize LTO increase the duration of customer-supplier relationships. That is, the major customers are more willing to maintain their relationships with a long-term oriented supplier. In addition, the supplier CEO’s LTO cultural background has a stronger impact on supply chain relationship duration when supplier CEOs have different culture background from the customer CEOs, when suppliers are managed by male CEOs, and when suppliers have less bargaining power over customers. Our inferences are robust to alternative model specifications, to alternative explanations of customer CEO turnovers and customer CEO LTO culture. To establish a causal relationship, we first utilize the predicted LTO culture derived in a two-stage analysis to correct for the potential endogeneity that CEOs with certain attributes may be strategically attracted to or hired by supplier firms. We, then, use a difference-in-differences approach in a natural experimental setting of 9/11, which generated plausible exogenous variations in CEO LTO culture. The analysis reveals that our documented positive effect becomes more prominent for supplier CEOs with the cultural origins from the Middle East or South-East Asia after 9/11. Overall, our study provides compelling evidence that the ethnic cultural background of supplier CEOs have significant contributions and implications for supply chain management discipline