Firm-supplier Relationships Research Articles

Technology and tax compliance spillovers: Evidence from a VAT e-invoicing reform in Peru

Our study uses administrative data on firm-to-firm transactions and quasi- experimental variation in the rollout of electronic invoicing reforms in Peru to study the diffusion of e-invoicing through firm networks and its effect on tax compliance. We find that voluntary e-invoicing adoption is higher amongst firms with partners who have been mandated to adopt e-invoicing, implying positive technology adoption spillovers. Spillovers are stronger from downstream partners and from export-oriented firms, consistent with incentives in the VAT system. Trading partners of firms who have been mandated to adopt e-invoicing report lower taxable purchases. Transaction-level data suggests that this decline comes from the termination of firm-supplier relationships. Lower purchases result in lower VAT credits, and higher VAT payments following the reform, suggesting positive tax compliance spillovers.

The impact of a firm's corporate social responsibility on firm–supplier relationships: The effect of secondary stakeholder CSR on inventory days

AbstractWell‐known benefits of corporate social responsibility (CSR) are goodwill and trust. Typically, research states that if a firm engages in CSR activities that benefit stakeholder X, then stakeholder X will reciprocate with higher levels of trust. We advance this line of research by examining whether CSR activities directed to stakeholder X increase the levels of trust between the firm and a different stakeholder, Y. Specifically, we examine the consequences of CSR actions that a firm directs toward non‐supplier stakeholders on the firm‐supplier relationship. We argue that a firm's secondary stakeholder CSR (e.g., community and environment) creates trust and goodwill with third parties (i.e., suppliers) that manifests in reduced inventory days. We use a data set comprising 27,551 firm‐year observations and find that secondary CSR is associated with decreased inventory days in more complex (more heterogenous and competitive), munificent (growing), dynamic (unpredictable), and socially irresponsible (e.g., gambling and tobacco) business environments.

Effects of channel members’ customer-centric structures on supplier performance

The authors examine the upstream impact of a firm’s customer-centric organizational structure on its supplier, including both positive effects of greater revenue and negative effects of demanding services that raise the supplier’s costs. These countervailing effects on supplier profit are moderated by characteristics of the firm’s buying center and the firm–supplier relationship, in accordance with the value capture literature. Study 1 examines the proposed firm-level financial effects of the dual processes, using surveys of industrial firms matched with secondary data from their supplier. Study 2 assesses the supplier-level net impact of the dual processes, using publicly available data to shed light on the upstream financial impact of firms’ customer-centric structures across a broad sample of Fortune 500 suppliers. Findings highlight the need for a supplier to proactively assess the structure of each buyer-firm, as a supplier can take steps to mitigate cost effects and enhance revenue effects.

Moral Hazard in the Presence of Suppliers and Competitors

This paper examines the interdependence between a firm's moral hazard problem and its roles as a buyer of inputs and seller of final products. We demonstrate that to maximize profit a firm needs to adapt incentive contracts to variations in the competitive environment of the supplier market. Additionally, we show that moral hazard attenuates aggressive pricing of suppliers with market power and that this effect might even outweigh agency costs. We also show how the interaction between the firm-agent and the firm-supplier relationship affects a firm's decision to (de)centralize the tasks of cost reduction and input production. Our results are shown to be robust to variations in input and product market competition.

Dimensions and antecedents of long-term orientation in firm-supplier relationships

This paper studies dimensionality and antecedents of long-term orientation in firm-supplier relationships. Drawing from a sample of 106 firm-supplier relationships in the field of logistics, longterm orientation is found to be a bi-dimensional construct. This study identifies one dimension linked to the desire to maintain a relationship that is expected profitable and another associated with concessions/sacrifices. The results obtained also show how two of the main antecedents of long-term orientation – trust and dependence – influence in different ways the two identified dimensions.

Debt, bargaining, and credibility in firm–supplier relationships

We examine optimal leverage for a downstream firm relying on implicit (self-enforcing) contracts with a supplier. Performing a leveraged recapitalization prior to bargaining increases the firm's share of total surplus. However, the resulting debt overhang limits the range of credible bonuses, resulting in low input quality. Optimal financial structure trades off bargaining benefits of debt with inefficiency resulting from overhang. Consistent with empirical evidence, the model predicts that leverage increases with supplier bargaining power (e.g., unionization rates) and decreases with utilization of non-verifiable inputs (e.g., human capital).

Educational level as moderating element of long-term orientation of supply relationships

In an increasingly complex and dynamic economic and business context, the study of the relationships that firms establish with their suppliers is a very important topic. Firms must use these relationships to ensure that the inputs they acquire are the most appropriate to achieve the desired product. But since not all firms, particularly SMEs, have personnel specifically trained to manage these relationships, or even to manage the firm itself, difficulties can sometimes arise in the management of the firm's supply function. The relationship marketing literature considers it beneficial to establish lasting relationships both with customers and with suppliers. It may be that people who are less well-educated academically are not aware of this situation. Thus, the current work aims to analyse the possible influence of the educational level of the purchasing/supply manager on the long-term orientation of firm-supplier relationships. Specifically, we use a sample of Spanish firms to analyse the moderating effect of this variable on the temporal orientation. Dividing the total sample into two subsamples – "better-educated" and "less well-educated" managers responsible for the supply function – we obtain some very interesting results and implications about the effects of trust, communication, cooperation, satisfaction and commitment on the temporal orientation of such relationships.

Corporate Social Responsibility in Supply Chains of Global Brands: A Boundaryless Responsibility? Clarifications, Exceptions and Implications

Corporate social responsibility (CSR) is increasingly becoming a popular business concept in developed economies. As typical of other business concepts, it is on its way to globalization through practices and structures of the globalized capitalist world order, typified in Multinational Corporations (MNCs). However, CSR often sits uncomfortably in this capitalist world order, as MNCs are often challenged by the global reach of their supply chains and the possible irresponsible practices inherent along these chains. The possibility of irresponsible practices puts global firms under pressure to protect their brands even if it means assuming responsibilities for the practices of their suppliers. Pressure groups understand this burden on firms and try to take advantage of the situation. This article seeks to challenge the often taken-for-granted-assumption that firms should be accountable for the practices of their suppliers by espousing the moral (and sometimes legal) underpinnings of the concept of responsibility. Except where corporate control and or corporate grouping exist, it identifies the use of power as a critical factor to be considered in allocating responsibility in firm–supplier relationship; and suggests that the more powerful in this relationship has a responsibility to exert some moral influence on the weaker party. The article highlights the use of code of conducts, corporate culture, anti-pressure group campaigns, personnel training and value reorientation as possible sources of wielding positive moral influence along supply chains.

The Long-Term Orientation of Firm-Suppliers Relationships

Within the food products marketing area, traditional researches have centred their attention on market and consumers. But because the final products are defined by their inputs, supply relationships are also important. The long-term orientation of the commercial relationships established between firms and their suppliers is a subject of great interest at present. Prior researches have shown that lasting relationships with supplier have positive effects on the quality of final products and on the firms satisfaction. But although there are many works that look at this temporal orientation, there has been no previous research analysing the agro-food sector. Therefore, the present paper analyses the moderating effect of belonging to an agro-food protection system on the factors determining the temporal orientation of firm-supplier relationships. Thus, taking as reference the Spanish agro-food sector, this current work examines this moderating effect. Our findings indicate that this property does indeed have an influence: through the effects of trust and communication on perceived satisfaction, on the one hand, and through the effect of this level of satisfaction on the temporal orientation of the supply relationship, on the other. Firms that belong to an agro-food protection system seem to value trust, communication and satisfaction more than others.

Moderating Effect of Relationship Life Cycle in Long-Term Orientation of Firm-Supplier Relationships

The study of the long-term orientation of the commercial relationships established between companies and their suppliers is a topic of great interest at the present time. But although many authors have analyzed this temporal orientation, few have examined its dynamic nature. Moreover, there are no previous studies looking at the moderating effect of the relationship life cycle on the factors determining the temporal orientation of these relationships, comparing how some antecedents could have different effects depending on the specific stage the relationship has reached. Thus, in the context of the Spanish agro-food sector, the current work examines this moderating effect, considering the industrial customers' point of view. Specifically, we analyze the effect of the initial stage compared with the intermediate stage of the life cycle on a set of antecedent factors of this long-term orientation. Our research offers important implications for the management of elements such as communication, cooperation, trust, satisfaction and commitment.

Product Change Intensity in the Personal Computer Industry: A Study of Firm-Supplier Innovation

In this paper, we develop a conceptual model to investigate external factors deemed to be critical to the frequency by which a firm releases new products - a phenomenon we refer to as intensity. Using data collected through a cross-sectional survey administered to 55 firms in the personal computer (PC) industry, and employing hierarchical regression, we examine the relationship between the rates of change in suppliers' component innovations and manufacturers' product innovations, and how that relationship is affected (moderated) by firm-supplier relationship closeness and competitive rivalry. Our results show that a firm's rate of product change is positively related to its key supplier's rate of component change. The results further suggest that the linkage between a firm's innovation frequency and that of its key supplier's is stronger for firms that have closer relationships with their suppliers and for firms that perceive themselves as facing higher levels of competitive rivalry. The study demonstrates the critical role played by suppliers in driving innovation in the PC industry, while also underscoring the importance of formal or informal alliances with suppliers and industry competition in fostering high product change intensities. More research is needed to determine if these findings are limited to the fast-moving PC industry

Corporate Social Responsibility in Supply Chains of Global Brands: A Boundaryless Responsibility? Clarifications, Exceptions and Implications

Corporate social responsibility (CSR) is increasingly becoming a popular business concept in developed economies. As typical of other business concepts, it is on its way to globalization through practices and structures of the globalized capitalist world order, typified in Multinational Corporations (MNCs). However, CSR often sits uncomfortably in this capitalist world order, as MNCs are often challenged by the global reach of their supply chains and the possible irresponsible practices inherent along these chains. The possibility of irresponsible practices puts global firms under pressure to protect their brands even if it means assuming responsibilities for the practices of their suppliers. Pressure groups understand this burden on firms and try to take advantage of the situation. This paper seeks to challenge the often taken-for-granted-assumption that firms should be accountable for the practices of their suppliers by espousing the moral (and sometimes legal) underpinnings of the concept of responsibility. Except where corporate control and or corporate grouping exist, it identifies the use of power as a critical factor to be considered in allocating responsibility in firm-supplier relationship; and suggests that the more powerful in this relationship has a responsibility to exert some moral influence on the weaker party. The paper highlights the use of code of conducts, corporate culture, anti-pressure group campaigns, personnel training and value reorientation as possible sources of wielding positive moral influence along supply chains.