The Accounting Review Vol. 93 No. 2 2018
Strategic Disclosures of Litigation Loss Contingencies When Customer-Supplier Relationships Are at Risk
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).
- DOI
- 10.2308/accr-51869
- Volume
- 93
- Issue
- 2
- Pages
- 137-159
- Language
- en
- Sources
- openalex bibtex:phds-export.bib crossref