Affiliation:
1. University of Toronto and The Chinese University of Hong Kong
2. University of Toronto
3. Queen's University
Abstract
ABSTRACT
In the presence of litigation-facing suppliers, the supply chain relationship is at risk. Suppliers with principal customers (dependent suppliers) have a higher concentration of sales to customers, and they are more at risk relative to suppliers without principal customers (non-dependent suppliers). As a result, we predict and find that litigation disclosure patterns differ for the two supplier types: dependent suppliers are more likely to delay bad news and accelerate good news related to litigation outcomes, compared to non-dependent suppliers. Such strategic disclosure patterns in our end-game setting are opposite to those documented in the existing supply chain literature for the repeated-game setting (for example, Hui, Klasa, and Yeung 2012).
JEL Classifications: M41; M48; K22.
Publisher
American Accounting Association
Subject
Economics and Econometrics,Finance,Accounting
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