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- Title
Strategic Disclosures of Litigation Loss Contingencies When Customer-Supplier Relationships Are at Risk.
- Authors
Cen, Ling; Chen, Feng; Hou, Yu; Richardson, Gordon D.
- 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).
- Subjects
DISCLOSURE in accounting; ACTIONS &; defenses (Law); CONTINGENCIES in finance; SUPPLIERS; CUSTOMER relations; SALES; FINANCE; CUSTOMER services
- Publication
Accounting Review, 2018, Vol 93, Issue 2, p137
- ISSN
0001-4826
- Publication type
Article
- DOI
10.2308/accr-51869