Accounting for intangibles in the supply chain: The performance and market value relevance of supply chain interactions

This dissertation presents new empirical evidence on the existence and measurement of intangible assets in the supply chain. In the first study, the market value relevance of comparisons between suppliers and customers along dimensions traditionally associated with market power is assessed. The second study examines the impact of the adoption of long-term relationships with major retail customers on supplier performance. The final study, in the context of intensively innovative industries, measures the contribution of current and past supplier research and development investments to customer profitability and value.; The results indicate that the attributes and activities of supply chain partners are relevant to firm profitability and value. The findings from the first study demonstrate that suppliers with greater R&D and advertising intensity than their customers contribute to both their own value and the value of their customers. The second study illustrates that the choice to adopt long-term relationships with retail customers reduces firm performance when compared to a control group of firms. Interestingly, however, when these firms' production functions in the post-adoption period are compared, the returns to tangible and intangible assets are greater for the test group than the control group. The final study shows that the investments suppliers make in innovation contribute to customer profitability for an average period of three years and that an estimate of "capitalized" supplier innovative efforts is relevant for customers in the capital markets. Overall, the results of these studies have implications for policy makers interested in developing more comprehensive supplementary disclosures to the financial statements and for managers when evaluating current and potential supply chain partners.