Customers' Risk Tolerance and Suppliers' Investment Inefficiency

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

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Original languageEnglish
Article number63
Journal / PublicationJournal of Risk and Financial Management
Volume15
Issue number2
Online published1 Feb 2022
Publication statusPublished - Feb 2022

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  • This full text is made available under CC-BY 4.0. https://creativecommons.org/licenses/by/4.0/
Link to Scopus https://www.scopus.com/record/display.uri?eid=2-s2.0-85124746117&origin=recordpage
Permanent Link https://scholars.cityu.edu.hk/en/publications/publication(9c05f850-fa16-40d3-a32d-f3c73964b442).html

Abstract

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 associated with suppliers' investment inefficiency, where investment inefficiency is more pronounced when the suppliers have less bargaining power over their customers. Our dynamic analysis confirms the causative relation between customer risk tolerance and supplier investment inefficiency and suggests that customers' risk tolerance plays a significant role in shaping suppliers' relationship-specific investment strategies.

Research Area(s)

  • risk tolerance, pilot, CEO, customer, supply chain, supplier inefficiency, SENSATION SEEKING, INCOMPLETE CONTRACTS, INFORMATION QUALITY, CEO OVERCONFIDENCE, CORPORATE, CHAIN, DISCLOSURES, MANAGEMENT, SPECIFICITY, PERFORMANCE

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Risk Tolerance Keyphrases
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Customer Risk Keyphrases
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Investment Ineffici... Keyphrases
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Supplier Investment Keyphrases
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Risk Supplier Keyphrases
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Investment Economics, Econometrics a...
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Customers Economics, Econometrics a...
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tolerance INIS
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risks INIS
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investment INIS
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Citation Format(s)

[ RIS ] [ BibTeX ]
Customers' Risk Tolerance and Suppliers' Investment Inefficiency. / Hrazdil, Karel; Kim, Jeong-Bon; Li, Xin.
In: Journal of Risk and Financial Management, Vol. 15, No. 2, 63, 02.2022.

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

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