This research analyzes the announcement returns of new product introduction delay on announcing firms, customers and suppliers. The sample is collected from SDC during 1989 to 2001. The customers and suppliers based are identified based on Benchmark input-output accounts. The event study methodology is used to compute abnormal stock market reactions.
The result suggests that abnormal return of the announcing firms is negative significant day -1, day 0 and day 1. CAR provides negative significant lose of market value for our entire testing window. Customers and suppliers abnormal return effect from the delay announcement with negative stock market reaction especially for day (-1, 1). Finding suggests that there is evident support hypotheses prediction. The announcing firm, dependent customers and dependent suppliers is significant related to frequency of delay. Degree of competitive is positive significant to dependent customers. The empirical result provides the negative related the length of delay to main customers and suppliers. There isn’t supported result announcing firms’ size. Overall result shows the effect of delay on customers and suppliers negative abnormal return.

This research analyzes the announcement returns of new product introduction delay on announcing firms, customers and suppliers. The sample is collected from SDC during 1989 to 2001. The customers and suppliers based are identified based on Benchmark input-output accounts. The event study methodology is used to compute abnormal stock market reactions.
The result suggests that abnormal return of the announcing firms is negative significant day -1, day 0 and day 1. CAR provides negative significant lose of market value for our entire testing window. Customers and suppliers abnormal return effect from the delay announcement with negative stock market reaction especially for day (-1, 1). Finding suggests that there is evident support hypotheses prediction. The announcing firm, dependent customers and dependent suppliers is significant related to frequency of delay. Degree of competitive is positive significant to dependent customers. The empirical result provides the negative related the length of delay to main customers and suppliers. There isn’t supported result announcing firms’ size. Overall result shows the effect of delay on customers and suppliers negative abnormal return.

Anonymous. (1989). IBM delays introduction of product that failed to meet test requirements [Electronic Version], 21, 20.

Bernardo, A., & Chowdhry, B. (2002). Resources, real options, and corporate strategy Journal of Financial Economics 63, 211-234.

Barclay, M., & Smith, C. G. (1995a). The maturity structure of corporate debt. Journal of Finance, 50, 609-631.

Barclay, M., & Smith, C. G. (1995b). The priority structure of corporate liabilities. Journal of Finance, 50, 899-917.

Biggadike, R. E. (1976). Entry strategy and performance. Harvard University Press, Cambridge

Birou, L. M. (1994). The role of the buyer-supplier linkage in an integrated product development project conditions. University of Texas in Austin, Texas.

Blackburn, J. D. (1991). Time-based competition: The next battleground in American ,manufacturing. New York.

Bowman, D., & Gatignon, H. (1995). Determinants of competitor response time to a new product introduction. Journal of Marketing Research, 32, 42-53.

Chaney, P., Martin, J., & Kensinger, J. (1990). The impact of new product introduction on the market value of firms. Journal of Business 64, 576-610.

Chaney, P. K., Devinney, T. M., & Winer, R. S. (1991). The impact of new product introduction on the market value of firms. Journal of Business 64(4), 573-610.

Chang, S. J. (1996). An evolutionary perspective on diversification and corporate restructuring: Entry, exit and economics performance during 1981-1989. Strategic Management Journal, 17(8), 587-612.

Chatterjee, R., & Sugita, Y. (1990). New product introduction under demand uncertainly in competitive industries. Managerial and Decision Economics, 1-12.

Chen, S.-S., Ho, K. W., & Ik, K. H. (2005). The wealth effect of new product introduction on industry rivals. Journal Business, 969.

Chen, S., & Ho, K. (1997). Market response to product-strategy and capital expenditure announcements in Singapore: Investment opportunities and free cash flow. Financial Management, 26, 82-88.

Chen, S. S., Ho, K. W., Ik, K. H., & Lee, C. F. (2002). How does strategic competition affect firm values? A study of new product announcements. Financial Management, 31, 67-84.

Clark, K. B., & Fujimoto, T. (1991). Product development performance. Unpublished MA, Harvard Business School Press, Cambridge.

Das, S., Sen, P. K., & Sengupta, S. (1998). Impact of strategic alliances on firm valuation. Academy of Management Journal, 41(1), 27-41. (1998). Impact of strategic alliances on firm valuation. Academy of Management Journal, 41(1), 27-41.

D'Aveni, R. A. (1994). Hyper competition: Managing the dynamics of strategic maneuvering. New york, Free press.

Davis, D. B. (1989). Beating the clock. Electronic Business, 21-29.

Debruyne, M., Moenaert, R., Griffin, A., Hart, S., Hultink, E., J, & Robben, H. (2002). The impact of new product launch strategic on competitive reaction in industrial markets. Journal of Product Innovation Management, 19, 159-170.

Derrick, S. B., Katherine, N. L., & Rechard, S. (2001). The impact of firm introductory strategic on consumers' perceptions of future product introductions and purchase decisions. Journal of Product Innovation Management, 18, 96-109

Dyer, J. H., & Ouchi, W. G. (1993). Japanese-style partnerships: Giving companies a competitive edge. Sloan Management Review 35, 51-63.

Fan, J. P. H., & Lang, L. H. P. (2000). The measurement of relatedness: An application to corporate diversification. Journal of Business, 73, 629-660.

Fee, C. E., & Thomas, S. (2004). Sources of gains in horizontal mergers: Evidence from customers, suppliers, and rival firms. Journal of Financial Economics, 74, 423-460.

Ferrier, W. J., Smith, K. G., & Grimm, C. M. (1999). The role of competition action in market share erosion, and industry dethronement: A study of industry leaders and challengers. Academy of Management Journal, 42(4), 372-388.

Gavin, C. R., Lowell, R. J., & Margo, E. A. (1993). Profile in small business: A competitive strategy approach.

Goldberger, A. S. (1991). A course in econometrics. Harvard University Press, Cambridge.

Granovetter, & Mark. (1985). Economic action and social structure: The problem of embeddedness. American Journal of Sociology, 91, 483-510.

Gujarati, D. N. (2003). Basic econometrics. New York: McGraw-Hill/Irwin.

Gupta, A. K., & Wilemon, D. L. (1990). Accelerating the development of technology based new products. California Management Rev, 32(2), 24-44.

Hartldy, J. L. (1994). Understanding supplier Involvement in their customers product development. University of Cinninanti.

Helper, S. (1991). How much has really changed between US automakers and their suppliers? Sloan Management Review, 32, 15-170.

Hendrick, K. B., & Singhal, K. B. (1997). Delays in new production introduction and the market value of the firm: The consequences of being late to the market. Management Science, 43(4).

Kamath, R. R., & Liker, J. K. (1994). A second look a Japanese product development. Harvard Business Review, 72, 154-170.

Kelm, K., Narayanan, V., & Pinches, G. (1995). Shareholder value creation during R&D innovation and commercialization stages. Academy of Management Journal, 38, 770-786.

Kleinshmidt, E. J., & Cooper, R. G. (1991). The impact of product innovation on performance. Journal of Product Innovation Management, 8, 240-251.

Kuester, S., Homburg, C., & Robertson, T. S. (1999). Retaliatory behavior to new product entry. Journal of Marketing 63, 90-106.

Lane, V., & Jacobson, R. (1995). Stock market reaction to brand extension announcement: The effects of brand attitude and familiarity. Journal of Marketing, 59, 3-77.

Lang, V., & Stulz, R. (1992). Contagion and competitive intra-industry effects of bankruptcy announcements. Journal of Finance Economics, 32, 45-60.

Lee, H. (1995). Shareholder wealth effects of new product rivalry: First movers, second movers, and laggard. University of Maryland.

Mahajan, V., Muller, E., & Bass, F. M. (1990). New production diffusion model in marketing: A review and directions for research. Journal of Marketing, 54, 1-26.

Mayer, Roger, C., James, H. D., & Shoorman, F. D. (1995). An integrative model of organizational trust. Academy of Management Review, 20, 709-734.

McAfee, R. P., & Williams, M. A. (1988). Can event studies detect anticompetitive mergers? Economic Letters, 28, 199-203.

Nau, R. F. (2005). What's a good value for R-squared? Decision 411 forecasting course material. Retrieved June 23, 2006,
http://www.duke.edu/~rnau/rsquared.htm

Nevens, T. M., Summer, G. L., & Uttal, B. (1990). Commercializing technology: What the best companies do. Harvard Business Review, 68(3), 154-163.

Ohmae, K. (1985). The borderless world: Power and strategy in the interlinked economy, managing innovation and new products key Japanese industries (Vol. 28). New York(1990): Harper Collins.

Porter, M. E. (1980). Competitive strategy. New York, Free Press.

Radas, S., & M.Shugan, S. (1998). Seasonal marketing and timing new product introductions. Journal of Marketing Research, 35, 269-315.

Ring, Smith, P., & Ven, A. H. V. d. (1994). Developmental process of cooperative interorganizational relationship. Academy of Management Review, 19, 90.

Ring, Smith, P., & Ven, A. V. d. (1992). Structuring cooperative relationship between organizations. Strategic Management Journal, 13, 483-498.

Robinson, W. T. (1988). Marketing mix reactions to entry. Marketing Science, 7(4), 368-385.

Robinson, W. T., & Fornell, C. (1985). The source of market pioneer advantages in consumer goods industries. Journal of Marketing Research, 22(2), 297-304.

Shahrur, H. (2005). Industry structure and horizontal takeovers: Analysis of wealth effect on rival, suppliers, and corporate customers. Journal of Finance Economics, 76, 61-98.

Shankar, V. (1999). New product introduction and incumbent response strategies: their interrelationship, and the role of multimarket contact. Journal of Marketing Research, 36, 327-344.

Song, M., & Walkling, R. (2000). Abnormal returns to rivals of acquisition targets: A test of the "acquisition probability hypothesis". Journal of Financial Economics, 55, 143-172.

Stalk, G. J. (1988). Time-the next source of competitive advantage. Harvard Business Review, 66, 41-51.

Tukel, O. I., & Wasti, S. N. (2001). Analysis of suppliers buyer relationships using resource constrained project scheduling strategies. European Journal of Operational Research, 129, 271-276.

Urban, G. L., Carter, T., Gaskin, S., & Mucha, Z. (1986). Market share reward to pioneering brands: An empirical analysis and strategy implications. Management Science, 32(6), 645-659.

Woolridge, J. (1988). Competitive decline and corporate restructuring: Is a myopic stock market to blame? Journal of Applied Corporate Finance, 1, 26-36.

Wynstra, F., & Pierick, E. T. (2000). Management supplier involvement in new product development: A portfolio approach. European Journal of Purchasing & Supply Management, 6, 49-57.

Wynstra, J. Y. F., & Sie, E. M. S. L. (1996). A tool for planning supplier involvement in product development projects. Supply management, innovation and economic development. Paper presented at the proceeding of the sixth international Annual IPSERA Conference, University of Naples.

Zucher, & Lynne, G. (1986). Production of trust: Institutional sources of economic structure, 1840-1920, in L.L Cumming and B. Staw. Research in Organizational Behavior, 53-111.