Product Market Competition and Corporate Relocations: Evidence from the Supply Chain

• 成果类型: Article
• 署名作者: Chen, Chen; Dasgupta, Sudipto; Huynh, Thanh D.; Xia, Ying
• 署名单位: Monash University; Chinese University of Hong Kong; Center for Economic & Policy Research (CEPR); European Corporate Governance Institute; Monash University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.4586
• 发表日期: 2023
• 页码: 5147-5173
• 关键词: establishment relocation; supply chain; Product market competition; Knowledge spillover

摘要

We show that intensified competition changes the location of business activity and, in turn, affects supply chain relationships. Using establishment-level data, we find that, when upstream product markets become more competitive, suppliers are more likely to relocate their establishments closer to customers. Following the supplier's relocation, its sales to the customer increase, its relationship with the customer is less likely to be terminated, and its innovation is more aligned with the customer's innovation. The relocated supplier also experiences more analyst following and institutional ownership that are in common with the customer and is more likely to issue equity than debt. However, the improved relationship, by causing the supplier to engage more in innovation dedicated to the customer, adversely affects creative innovation, which is known to drive growth.