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Suppliers that are farther away from their customers make more relationship-specific investments (RSI). This association is more pronounced when it is less costly for the customer to switch to alternative suppliers and when the supplier operates in relatively opaque information environments. Using the introduction of new airline routes as an exogenous shock to the distance between supply chain partners, we show that the relation between supplier RSI and distance may be causal. We also provide evidence that suppliers with larger RSI are better able to maintain long-distance business relationships and are associated with higher firm value. These findings suggest an important dimension of supplier commitment: Suppliers use RSI as a signal of their willingness to fulfill on-going implicit claims. KEYWORDS commitment, customer-supplier relationship, geographic proximity, holdup problem, principal-agent problem, relationship-specific investments JEL CLASSIFICATION G32, G41, Z13, 1 | INTRODUCTION In this paper, we examine whether and how geographic distance from a major customer affects suppliers' willingness to make relationship-specific investments (RSI). These investments require commitment of [...]