Many product markets today are characterized by the existence of a retailer (e.g., Home Depot, Toys R Us) that serves as gatekeeper of new product introductions. Recently, virtually all such retailers have established online stores to expand their shelf spaces as well as their customer bases. In...

Using data involving customer-supplier relationships and a large sample of U.S. publicly listed firms, our study documents a negative and statistically significant relationship between economic-policy uncertainty and firms’ customer-base concentration. The negative relation is predominant in...

Using the staggered corporate income tax changes across US states, we find that tax increases in states where customers operate significantly reduce their suppliers’ return on assets, and operating and gross profit margins. Such effect is more pronounced for suppliers who have high sales...

We investigate whether labor unionization of customer firms affects the operating performance of their dependent suppliers. Using a sample of U.S. union elections, our regression discontinuity tests show that passing a union election leads to a 6.9 percentage-point decline in supplier operating...

It is a popular practice for firms to acquire a block share of their manufacturers' ownership. This paper studies the economic impacts of such partial vertical ownership (PVO) in the presence of downstream market competition. Prior studies of vertical integration suggest that firms benefit from...

Technology transfer to low cost locations offers global firms an opportunity to reduce their variable costs involved in serving emerging markets. However, such moves may also make imitation by local competitors easier. As a consequence, technology transfer may create competition in the local...

In this paper, we examine how firms can leverage reference-group effects (RGEs) in sequential introduction of upgraded products. RGEs arise when consumers engage in social comparisons: leaders desire to distinguish themselves from followers and followers desire to mimic leaders. We find that...

Research has shown that firms with overconfident chief executive officers (CEOs) tend to overinvest and are exposed to high risks due to unrealistically optimistic estimates of their firms’ future performance. This study finds evidence that overconfident CEOs also affect suppliers’ risk...