A fundamental analysis of customer/supplier relationships : Cohen & Frazzini (2008) : a profitability problem?
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- Master Thesis 
This thesis looks at the fundamental differences between customers and suppliers in relation to Cohen & Frazzini (2008) and investigates whether profitability could be a significant factor affecting their customer momentum returns. The paper shows that the average customer is larger in size and has higher profitability. These differences are statistically significant and persistent over time. Furthermore I show that customer –and supplier profitability is correlated, and that the suppliers that are linked to high (low) profitability customer firms also have high (low) profitability. Given that profitability is known to cause return predictability, I propose that profitability could be a significant factor explaining the customer momentum suggested by Cohen & Frazzini (2008).