Customers' Capital Market Information Quality and Suppliers' Performance

• 成果类型: Article
• 署名作者: Radhakrishnan, Suresh; Wang, Zheng; Zhang, Yue
• 署名单位: University of Texas System; University of Texas Dallas; City University of Hong Kong
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.12211
• 发表日期: 2014
• 页码: 1690-1705
• 关键词: Information sharing; earnings guidance and quality; analysts; Credit rating; DuPont profitability ratios

摘要

We empirically examine the association between downstream firms', i.e., customers' capital market information quality, and the operating performance of upstream firms, i.e., suppliers. Customers' capital market information quality is measured by the customers' provision of earnings forecasts, the customers' reported earnings quality, and the customers' coverage by financial analysts and credit rating agencies. We hypothesize and find a positive association between customers' capital market information quality and suppliers' operating performance measured by the DuPont profitability ratios. The association is stronger for suppliers with higher sales volatility, no order backlogs, customers who are less dependent on their input, and shorter business relation with customers. Collectively, the results suggest that the quality of information provided by the customers to the capital market has a spillover effect in the input market, i.e., helps the suppliers improve their performance.