Does Relationship Matter? Buyer-Supplier Relationship and the Association between Supplier Concentration and Cost Structure

Lulu Di, Wei Jiang, Wei Li, Xiaoling Chen

Research output: Working paper

Abstract

We examine the association between supplier concentration and cost structure and how such association varies with the nature of buyer-supplier relationship. We predict a positive association between supplier concentration and cost elasticity. Furthermore, we predict that the positive association is less pronounced when there is a more cooperative buyer-supplier relation. We test our predictions with hand-collected data from the supplier information disclosed by Chinese listed firms. Using three proxies for buyer-supplier relationship: buyer firm ownership structure (state-owned enterprises vs. non-state-owned enterprises), the length of buyer-supplier relationship, and enterprise trustworthiness, we find results consistent with our predictions. Our study contributes to the cost management literature and interfirm relationship literature by showing that the relation between supplier concentration and cost structure varies with the nature of buyer-supplier relationship.
Original languageEnglish (US)
DOIs
StatePublished - Jul 31 2017

Publication series

NameAAA 2018 Management Accounting Section (MAS) Meeting

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Buyer-supplier relationships
Suppliers
Cost structure
Prediction
Ownership structure
Cost management
Firm ownership
State-owned enterprises
Buyers
Buyer-supplier relations
Elasticity
Interfirm relationships
Trustworthiness
Costs
Supplier relations

Keywords

  • Supplier concentration
  • cost structure
  • cost behavior
  • interfirm relationship

Cite this

Does Relationship Matter? Buyer-Supplier Relationship and the Association between Supplier Concentration and Cost Structure. / Di, Lulu; Jiang, Wei; Li, Wei; Chen, Xiaoling.

2017. (AAA 2018 Management Accounting Section (MAS) Meeting).

Research output: Working paper

Di, Lulu ; Jiang, Wei ; Li, Wei ; Chen, Xiaoling. / Does Relationship Matter? Buyer-Supplier Relationship and the Association between Supplier Concentration and Cost Structure. 2017. (AAA 2018 Management Accounting Section (MAS) Meeting).
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