Customers' tone in MD&A disclosure and suppliers' inventory efficiency: Evidence from China
This article examines whether and how customers' tone in MD&A disclosure affects suppliers' inventory efficiency. Using an unbalanced panel dataset compiled from multiple archival sources of Chinese‐listed companies, we find that the more positive tone in MD&A disclosure of custome...
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Published in | Managerial and decision economics Vol. 43; no. 8; pp. 3833 - 3853 |
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Main Authors | , , |
Format | Journal Article |
Language | English |
Published |
Chichester
Wiley Periodicals Inc
01.12.2022
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Subjects | |
Online Access | Get full text |
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Summary: | This article examines whether and how customers' tone in MD&A disclosure affects suppliers' inventory efficiency. Using an unbalanced panel dataset compiled from multiple archival sources of Chinese‐listed companies, we find that the more positive tone in MD&A disclosure of customers is associated with the higher efficient suppliers' inventory and the results still hold after a battery of robust tests. The customers' tone in MD&A disclosure affects supplier firms' inventory efficiency by reducing the bullwhip effect. In addition, we find that customers' tone in MD&A disclosure has a more pronounced effect on improving suppliers' inventory efficiency when the customers have more analyst coverage and when the suppliers have less bargaining power. |
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Bibliography: | Funding information Key Project of National Social Science Foundation of China, Grant/Award Number: 20AGL016 |
ISSN: | 0143-6570 1099-1468 |
DOI: | 10.1002/mde.3632 |