Financial Reports Based Proxies for Bargaining Power of Buyers and Sellers

2015 Academy of Management Annual Meeting, Vancouver, Canada, August 2015

31 Pages Posted: 27 Aug 2015 Last revised: 4 Feb 2016

See all articles by Clark Hampton

Clark Hampton

University of Waterloo

Theophanis C. Stratopoulos

University of Waterloo - School of Accounting and Finance

Date Written: August 9, 2015

Abstract

The objective of this exploratory analysis is to introduce proxies for the bargaining power of buyers (suppliers) and provide some initial evidence regarding their ability to account for cross sectional variations in profitably measures. We leverage information that is readily available to modern analysts and managers, i.e., SEC filed statements, in order to generate a count of buyers (suppliers) of a focal firm. We argue that as this number is rising the bargaining power of the focal firm’s buyers (suppliers) is declining. Preliminary results based on univariate non-parametric tests indicate that firms ranked high in terms of the suggested proxies, i.e., their buyers (suppliers) have low bargaining power, perform better than their peers which are ranked low on the same proxies.

Keywords: competition, bargaining power, buyers, suppliers, profits, financial reports, text mining

JEL Classification: D40, L10, L20, M40

Suggested Citation

Hampton, Clark and Stratopoulos, Theophanis C., Financial Reports Based Proxies for Bargaining Power of Buyers and Sellers (August 9, 2015). 2015 Academy of Management Annual Meeting, Vancouver, Canada, August 2015 . Available at SSRN: https://ssrn.com/abstract=2650793 or http://dx.doi.org/10.2139/ssrn.2650793

Clark Hampton

University of Waterloo ( email )

200 University Avenue West
Waterloo, Ontario N2L 3G1 N2L 3G1
Canada

Theophanis C. Stratopoulos (Contact Author)

University of Waterloo - School of Accounting and Finance ( email )

200 University Avenue West
Waterloo, Ontario N2L 3G1 N2L 3G1
Canada
519-888-4567 x35943 (Phone)

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