Supply-Chain Spillover Effects and the Interdependence of Firm Financing Decisions

@inproceedings{Johnson2014SupplyChainSE,
  title={Supply-Chain Spillover Effects and the Interdependence of Firm Financing Decisions},
  author={W. Johnson and Jun-Koo Kang and Ronald W. Masulis and Sang-Eun Yi},
  year={2014}
}
We analyze equity financing decisions by firms with major customer relationships to assess whether major trading relationships create interdependence in policies and market values. We find supplier issuance decisions have significant negative effects for large customers, which become more pronounced when information asymmetry or economic dependence of suppliers and customers rise or when suppliers make larger relationship-specific investments or offer valuable product guarantees. Incentives to… Expand
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