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How the interactions between firms along a supply chain affect their asset prices

Bustamante, Maria Cecilia (2021) How the interactions between firms along a supply chain affect their asset prices. LSE Business Review (12 Feb 2021). Blog Entry.

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Abstract

The finance literature has neglected until recently the study of how customer-supplier strategic interactions may affect firms’ asset prices. Maria Cecilia Bustamante investigates how a firm’s ability to negotiate input prices in supply chains affects its valuation and expected returns. She finds that firms with greater impatience to invest have less bargaining power while negotiating input prices, thus extracting a lower fraction of the profits occurring along a supply chain. Firms with greater vertical bargaining power, such as Amazon, are not only more valuable, but also yield higher expected returns.

Item Type: Online resource (Blog Entry)
Official URL: https://blogs.lse.ac.uk/businessreview/
Additional Information: © 2021 The Author
Divisions: LSE
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Date Deposited: 26 Mar 2021 14:12
Last Modified: 19 Aug 2021 23:03
URI: http://eprints.lse.ac.uk/id/eprint/109041

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