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Conference Paper: Does Common Institutional Ownership Mitigate Hold-up Problems Along The Supply Chain
Title | Does Common Institutional Ownership Mitigate Hold-up Problems Along The Supply Chain |
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Authors | |
Keywords | Common ownership Incomplete contracts Supply chain Innovation |
Issue Date | 2022 |
Publisher | Camphor Economics Circle. |
Citation | The 4th Camphor Conference for Finance (CCF), Tianjin, China, 12-13 May, 2022 How to Cite? 第四届“香樟金融学论坛”, 天津, 中国, 12-13 May, 2022 How to Cite? |
Abstract | We show that common institutional ownership (CIO) along the supply chain mitigates hold-up problems faced by supplier-customer relationships resulting from incomplete contracts. Suppliers make more relationship-specific investments towards their customers that share common institutional investors. Such effect is stronger as the CIO network between a supplier and customer pair becomes wider and deeper. We establish causality by exploiting exogenous shocks to CIO using a broad sample of mergers between financial institutions and further find the CIO effects on suppliers’ investment specificity are stronger for those who ex-ante face severer hold-up concerns. Our work sheds light on the hold-up concerns mitigation effect of CIO on firms’ decision to make relationship-specific investments along the supply chain. |
Persistent Identifier | http://hdl.handle.net/10722/317122 |
DC Field | Value | Language |
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dc.contributor.author | Deng, Y | - |
dc.contributor.author | Li, J | - |
dc.date.accessioned | 2022-09-27T02:49:53Z | - |
dc.date.available | 2022-09-27T02:49:53Z | - |
dc.date.issued | 2022 | - |
dc.identifier.citation | The 4th Camphor Conference for Finance (CCF), Tianjin, China, 12-13 May, 2022 | - |
dc.identifier.citation | 第四届“香樟金融学论坛”, 天津, 中国, 12-13 May, 2022 | - |
dc.identifier.uri | http://hdl.handle.net/10722/317122 | - |
dc.description.abstract | We show that common institutional ownership (CIO) along the supply chain mitigates hold-up problems faced by supplier-customer relationships resulting from incomplete contracts. Suppliers make more relationship-specific investments towards their customers that share common institutional investors. Such effect is stronger as the CIO network between a supplier and customer pair becomes wider and deeper. We establish causality by exploiting exogenous shocks to CIO using a broad sample of mergers between financial institutions and further find the CIO effects on suppliers’ investment specificity are stronger for those who ex-ante face severer hold-up concerns. Our work sheds light on the hold-up concerns mitigation effect of CIO on firms’ decision to make relationship-specific investments along the supply chain. | - |
dc.language | eng | - |
dc.publisher | Camphor Economics Circle. | - |
dc.subject | Common ownership | - |
dc.subject | Incomplete contracts | - |
dc.subject | Supply chain | - |
dc.subject | Innovation | - |
dc.title | Does Common Institutional Ownership Mitigate Hold-up Problems Along The Supply Chain | - |
dc.type | Conference_Paper | - |
dc.identifier.doi | 10.2139/ssrn.4063896 | - |
dc.identifier.hkuros | 337076 | - |
dc.publisher.place | Tianjin, China | - |