Managerial ability and supply chain power

G M Wali Ullah, Juan Luo and Alfred Yawson

Journal of Contemporary Accounting and Economics, 2024, vol. 20, issue 2

Abstract: This paper investigates how major customer firms, managed by highly capable managers, can gain bargaining power over their suppliers. Our results document a positive association between managerial ability and the supply chain power a major customer firm holds over its suppliers. The results are robust to endogeneity concerns, tested through two-stage least squares (2SLS) regressions and difference-in-differences estimates surrounding forced CEO turnovers. We find the positive association to be stronger for durable goods manufacturers and higher ability managers engaged in socially responsible activities and corporate innovation. We provide evidence that higher-ability managers use their enhanced bargaining power to secure greater supplier trade credit.

Keywords: Managerial ability; Supply chain power; Major customer; Corporate innovation; Corporate social responsibility (search for similar items in EconPapers)
JEL-codes: G00 G30 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jocaae:v:20:y:2024:i:2:s1815566924000146

DOI: 10.1016/j.jcae.2024.100414

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