Supplier/customer considerations in corporate financial decisions

• Main Authors: Jayant R. Kale, Costanza Meneghetti
• Format: Article
• Language: English
• Published: Elsevier 2014-09-01
• Series: IIMB Management Review
• Subjects: Capital structure; Corporate policies; Product markets; Nonfinancial stakeholders; Supply chain
• Online Access: http://www.sciencedirect.com/science/article/pii/S0970389614000573

Earlier research focussed on firm characteristics and the interests of financial stakeholders (shareholders and bondholders) as determinants of corporate policies. Subsequent research recognized that corporate policies are determined in a broader environment that includes nonfinancial stakeholders such as suppliers, customers, labour etc. In this paper, we summarize the theoretical and empirical research that includes supplier/customer considerations in the determination of corporate policies such as capital structure, dividends, takeovers, earnings management, and product quality. We highlight the significant effect that the inclusion of supplier/customer interests has on these corporate policies.