We explore whether firms internalize the product market concerns of their economically linked peers by examining merger and acquisition decisions in the context of customer–supplier relations. Given the extensive transfer of capital, knowledge, and information between merging parties, we hypothesize that customers’ competition concerns discourage their suppliers from engaging in vertically conflicted transactions (i.e., acquisitions of their customers’ rivals or suppliers to those rivals). Consistent with our hypothesis, we find that suppliers are less likely to engage in such transactions when their customers are subject to higher product market competition. Moreover, the effect is more pronounced when suppliers and customers have greater relationship-specific investments and when customers face heightened proprietary information concerns. Using plausibly exogenous variation in common ownership between customers and their rivals as a shock to customers’ competition concerns, we conclude that the link between customers’ competition concerns and supplier acquisitions is likely causal. Our findings suggest that firms alter their investment and strategic decisions in response to the product market competition concerns of their economically related peers.

中文翻译：

---

内部化同行公司产品市场的担忧：供应链关系和并购活动


我们通过在客户与供应商关系的背景下审视并购决策，探讨企业是否将其经济联系同行的产品市场担忧内在化。鉴于合并方之间资本、知识和信息的广泛转移，我们假设客户对竞争的担忧阻止其供应商参与垂直冲突的交易（即收购客户的竞争对手或收购这些竞争对手的供应商）。与我们的假设一致，我们发现当供应商的客户面临更高的产品市场竞争时，供应商不太可能参与此类交易。此外，当供应商和客户有更多的特定于关系的投资以及当客户面临更高的专有信息问题时，这种影响会更加明显。利用客户及其竞争对手之间共同所有权的看似外生的变化作为对客户竞争担忧的冲击，我们得出结论，客户的竞争担忧与供应商收购之间可能存在因果关系。我们的研究结果表明，企业会改变投资和战略决策，以应对经济相关同行对产品市场竞争的担忧。