Strength in Numbers: Information Sharing and Spillover Effects on Inventory Management Efficiency
Mr. Ray Rui Gao
Ph.D. Candidate in Accounting
Simon Business School
University of Rochester
This study investigates the spillover effects of sales information sharing among retailers along the supply chain. Using the NielsenIQ platform setting where participating retailers exchange sales data, I find that upstream manufacturers experience a significant increase in inventory turnover after their retailers join the platform. This effect is stronger when the platform covers a larger share of manufacturers’ products and when more sales information is shared by participating retailers. Conversely, the effect is weaker when the manufacturers are already well-informed about market demand. I further show that, following retailer information sharing, manufacturers become better informed and issue more frequent and accurate management forecasts. Lastly, channel tests show that manufacturers gain insights into market demand mainly through internal private interactions with retailers rather than external channels, such as retailer disclosures. Collectively, my evidence suggests that retailer information sharing enhances understanding of market demand, leading to more efficient inventory management at manufacturers.