We examine the effect of the risk tolerance of downstream firms (i.e., customers) on the investment inefficiency of upstream firms (i.e., suppliers). Using the pilot licensing status of the CEOs as a proxy for their inherent risk tolerance, we find that customer firms led by pilot CEOs are...

Recently researchers have integrated aspects of supply risk management into decision models for determining the optimal design of supply networks. A purchasing manager faces a fundamental trade-off when designing the supply network and deciding upon the allocation of purchasing volumes across a...