The labor market effect of customer concentration: based on resource allocation perspective

Zichao Zhang and Chao Liu

International Journal of Manpower, 2025, vol. 46, issue 9, 1717-1733

Abstract: PurposeWe empirically investigate the impact of customer concentration on the employment-absorbing capacity of firms, aiming to identify key factors behind the declining employment scale among listed companies in China’s relationship-based transaction environment.Design/methodology/approachThis study conducts an empirical analysis based on a sample of 3920 A-share listed companies in Shanghai and Shenzhen Stock Exchanges from 2007 to 2023, utilizing fixed effects models.FindingsOur findings indicate that customer concentration has a significant negative impact on the employment-absorbing capacity of firms. Mechanism analysis indicates that customer concentration reduces the employment-absorbing capacity by increasing corporate financialization and squeezing the fixed investment. Further analysis reveals that this impact is more pronounced in firms with weaker market competitiveness, higher financial risk, higher labor intensity and more severe agency conflicts. The spillover effect test shows that the customer concentration of the focal firm limits the employment-absorbing capacity of firms within the same industry.Originality/valueWe not only introduce a novel perspective for the study of corporate employment-absorbing capacity, but also offer valuable insights for managing customer relationships and optimizing resource allocation within firms.

Keywords: Employment absorption; Customer concentration; Corporate hiring decisions; Resource allocation (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/ijm/article/46/9/1717/1278 ... stomer-concentration (text/html)
https://www.emerald.com/ijm/article-pdf/46/9/1717/ ... m-11-2024-0776en.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:ijmpps:ijm-11-2024-0776

DOI: 10.1108/IJM-11-2024-0776

Access Statistics for this article

International Journal of Manpower is currently edited by Professor Adrian Ziderman

More articles in International Journal of Manpower from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().