The Effect Of Managerial Ability Of Major Customers On The Capital Structure Of Suppliers

The study of corporate capital structure is one of the most important topics in corporate finance.In this regard,a wealth of literature has emerged,including MM theory,trade-off theory,pecking order financing theory and other classical theories.But throughout the literature of the enterprise capital structure decision can be found that most of these articles are from their own characteristics,which only focus on their own characteristics such as scale,operating conditions,solvency influence on capital structure,and did not notice the related to enterprise in the supply chain upstream and downstream interests related party's influence on the enterprise capital structure.In fact,with the increasing economic globalization,the contact and cooperation between enterprises are more frequent than at any other time in history.Such changes in the objective environment require enterprises to make decisions with a more comprehensive vision and an open mind.Therefore,it is of theoretical and practical significance to study the capital structure of enterprises from the perspective of supply chain.Based on the management's heterogeneity,this paper studies the influence of different enterprise managers on upstream suppliers from the perspective of the customer's management characteristic.Among all the characteristics related to managers,the most critical one is the ability of managers.Therefore,this paper focuses on the influence of the ability of managers of major customers on the capital structure of suppliers.Firstly,this paper reviews the relevant literature on capital structure,supplier-customer relationship and management capability,clarifies the definition of important concepts,and briefly introduces the research history and major capital structure research theories.Through literature review,it is found that in recent years,the research on capital structure has gradually shifted to the research on the decisionmaking behavior and results of capital structure.Therefore,this paper also studies the influence of major customer management ability on supplier capital structure from this perspective.Then,the paper analyzes the influence path of upstream and downstream supply chain from the aspects of bargaining power,and puts forward the hypothesis.Moreover,it is noted that most of the previous articles studied from the perspective of total amount,regarding debts of different types,terms and conditions as homogeneous and ignoring the differences between different debts.Therefore,this article also distinguished debts from the perspective of term,and selected three dependent variables,namely short-term debt level(),long-term debt level()and all debt levels()including long and short term,to further study the internal adjustment of capital structure.The article refers to the selection of the variables in the literature,and builds the OLS regression model,and uses the American compustat database to study the impact of the main client's management capacity on the supplier's capital structure.In order to make a comparison,this paper uses three indicators,namely customer industry concentration,supplier bargaining power and supplier financial constraint,to make a grouping regression for samples,so as to judge which factors will affect the adjustment effect of this supply chain relationship.Finally,the robustness test and endogenous test are carried out to further verify the reliability of the conclusion.Through theoretical derivation and empirical test,we find that under the same conditions,the higher the management ability of major customers is,the lower the overall debt level of suppliers and the shorter the debt term will be.Specifically,the proportion of short-term debt rose and that of long-term debt fell.At the same time,this adjustment effect is more significant when the concentration degree of major customers is higher,the bargaining power of suppliers is lower,or the financial constraint of suppliers is higher.For the first time,this paper studies the influence on supplier capital structure from the perspective of manager characteristics.It has enriched the research literature on supply chain finance and enterprise capital structure,which is of great practical significance.