07/18/2022
By Mary Lou Kelly
The Manning School of Business Department of Accounting invites you to attend a doctoral dissertation defense by PhD Candidate Juwon Jang on “The Role of Relationship-Specific Risk on Supplier Firms' non-GAAP Earnings Disclosure Decision.”
Candidate name: Juwon Jang
Defense Date: Friday, July 29, 2022
Time: 10 a.m. to noon
Location: Pulichino Tong Business Center, Room 205 (Dean's suite conference room)
Dissertation Title: The Role of Relationship-Specific Risk on Supplier firms' non-GAAP Earnings Disclosure Decision
Advisor: Khondkar Karim
Committee Members:
- Khondkar Karim (Chair), Accounting Department, UMass Lowell
- Huiqi Gan Accounting Department, UMass Lowell
- Heeick Choi, Accounting Department, UMass Lowell
- Chi Zhang, Finance Department, UMass Lowell
Abstract:
This dissertation investigates how suppliers' relationship-specific investments (risk) influence their non-GAAP disclosure decisions. There have been two competing studies and arguments regarding how relationship specificity affects suppliers' public disclosure decisions. Customer firms with greater bargaining power could, on the one hand, demand greater transparency from their suppliers. Alternatively, when suppliers' relationship-specific investments (risks) are high, major customers may be less likely to request their suppliers' non-GAAP earnings information due to the low costs associated with accessing suppliers' private information. This study provides additional evidence for supporting the private information channel facilitation hypothesis using suppliers' non-GAAP earnings disclosure decision. Specifically, this study finds that the likelihood of non-GAAP earnings disclosure is negatively associated with relationship-specific investments (risk), which supports the notion that enhanced private information flows between suppliers and major customers with high relationship-specific risk. Furthermore, this negative association is statistically significantly stronger when a supplier and its major customer share a director, or an analyst and a supplier is closely located to its major customer.