Relationship between horizontal and vertical part supplier management to stabilize production and the capital structure of tourism in global information technology companies
This analyzes the relationship between the debt ratio of parts suppliers and the strategic characteristics of the company in the overall SCM system to stabilize production from a financial perspective by dividing the company’s production strategy into horizontal and vertical cases. The strategic alliance types and the vendor-specific types were used as substitute variables that represented horizontal and vertical structure, respectively. The difference between the actual and target debt ratio of global parts suppliers and their relationship with the strategic SCM characteristics of the company was analyzed using the generalized method of moments, which utilizes instrumental variable estimation method. This study found that the greater a company’s horizontal integration of parts suppliers was, the lower a company’s debt ratio was. Specifically, non-equity alliances, such as technology alliances and research and development alliances, have reduced debt ratios more than companies with equity alliances. Conversely, in the case of vertical structure, primary vendors had a lower debt ratio than secondary vendors. This is the first study to analyze the relationship between production strategy and the capital structure of parts suppliers of global IT companies. The comparison was conducted through an objective accounting data of which importance is increasing in horizontal and vertical SCM strategies to stabilize production.