MANAGERIAL LEARNING THROUGH CUSTOMER-SUPPLIER LINKS

We provide empirical evidence that supplier firms' managers learn new information from their customers' stock prices when they make investment, long-term financing, short-term financing, and dividend decisions. Our findings provide novel empirical evidence that the stock market has real effects on the economy through customer-supplier links. Our results indicate that managerial learning is not confined to peers' or firms' own stock prices but is a more comprehensive process that includes cross-industry learning. Furthermore, managerial learning is not limited to investment decisions but is also present in long-term financing, short-term financing, and dividend decisions.