DUNMORE, Pa. — Yili Lian, assistant professor of business at Penn State Worthington Scranton, presented his research paper, “Financial Distress and Customer-Supplier Relationships" at the 29th Australasian Finance and Banking Conference in Sydney, Australia in December.
This paper was recently accepted for publication in the Journal of Corporate Finance, a leading corporate finance journal that publishes both theoretical and empirical papers.
Lian's paper studies the role of customer-supplier relationships on suppliers’ financial distress. “If a significant amount of a supplier’s sales is tied to a major customer, the supplier’s financial health is influenced by the major customer’s financial conditions,” Lian explained.
“I find that a supplier’s probability of financial distress is positively related to its major customer’s financial distress status," he said. "This relation persists for up to two years after a major customer is in financial distress. Further, I show that the relationship is more pronounced when customer-supplier relationships are stronger, when a major customer is more likely to fail in the future, and when the supplier makes unique products.”
The results, Lian said, highlight the importance of understanding customer-supplier relationships when analyzing a firm’s probability of financial distress.
Lian has been teaching at Penn State Worthington Scranton since 2013. Prior to joining the University, he was an adjunct professor and doctoral student at Baruch College, City University of New York, where he attained his doctorate in finance.
He received his master’s of philosophy degree in business from the Graduate Center, City University of New York; a master’s of arts degree in finance from Peking University; and his bachelor’s in accounting from the University of International Business and Economics.
He is also the recipient of numerous awards, including: the 2012 Southern Finance Association’s Outstanding Ph.D. Paper Award, the Baruch College Job Market Travel Award (2012), and the CUNY Graduate Center Conference Presentation Award (2012), as well as a CUNY University Fellowship and Peking Unviersity’s Outstanding Student Award.