Chen, T. K., Liao, H. H., and Liao, C. Y. 2018. Supply Chain Relationship Uncertainty and Corporate Credit Risk. NTU Management Review, 28 (2): 165-204. https://doi.org/10.6226/NTUMR.201808_28(2).0006
Tsung-Kang Chen, Professor, Department of Management Science, National Chiao Tung University
Hsien-Hsing Liao, Professor, Department of Finance, National Taiwan University
Chung-Yu Liao, M.S., Department of Finance and International Business, Fu Jen Catholic University
Abstract
This study explores the effects of supply chain relationship uncertainty (SCRU) on corporate credit risk by American bond market data from year 2000 to 2008. Empirical results show that the firm-customer relationship uncertainty (FCRU) is significantly and positively related to bond yield spreads, whereas the firm-supplier relationship uncertainty (FSRU) exhibits nonsignificant effects when controlling for other well-known bond yield determinant variables. In addition, this research also finds that business cycle condition non-significantly changes the FCRU effect on bond yield spreads. Finally, the results we derive by evaluating SCRU variables through other weighted methods or by controlling for additional variables affecting cash flow variations are robust.
Keywords
Credit riskSupply chain relationship uncertaintyBond yield spreads