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Macroeconomic risks of supply chain counterparties and corporate bond yield spreads

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  • Tsung-Kang Chen
  • Hsien-Hsing Liao
  • Hsiao-Chun Huang

Abstract

The domino phenomenon that corporate failures occur along supply chain during the recent financial tsunami shows the important effects of the systematic risk of a firm’s supply chain counterparties on its credit risk (or bond yield spreads). It motivates this research to investigate the effects of supply chain counterparties’ macroeconomic risks on corporate bond yield spreads by employing 10,022 American bond observations from 1997 to 2008. The empirical results show that the macroeconomic risks of a firm and its customers are significantly and positively related to the firm’s bond yield spreads while those of suppliers have insignificant effects. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Tsung-Kang Chen & Hsien-Hsing Liao & Hsiao-Chun Huang, 2014. "Macroeconomic risks of supply chain counterparties and corporate bond yield spreads," Review of Quantitative Finance and Accounting, Springer, vol. 43(3), pages 463-481, October.
    • Handle: RePEc:kap:rqfnac:v:43:y:2014:i:3:p:463-481
    DOI: 10.1007/s11156-013-0382-8
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    Cited by:

    1. Han-Hsing Lee, 2020. "Distress risk, product market competition, and corporate bond yield spreads," Review of Quantitative Finance and Accounting, Springer, vol. 55(3), pages 1093-1135, October.

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    More about this item

    Keywords

    Supply chain; Macroeconomic risk; Credit risk; Bond yield spreads; G12; M21;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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