Does the risk of major customer need to be balanced? The role of customer concentration in corporate governance

Di Gao, Jiangming Ma and Yiru Wang

PLOS ONE, 2021, vol. 16, issue 11, 1-20

Abstract: In the operation and management of the company, major customers may affect a supplier firm’s level of governance. The goal of our study is investigating whether a major customer acts as an important role in corporate governance in emerging markets and exposing the mechanism that how major customers affect corporate decision-making. There is a growing body of literature involving studies about the effect of customer concentration on firm performance of western countries. Few studies have recognized to what degree does customer concentration satisfy the sustainable development of supplier firm. Using a sample of Chinese listed firms, we found a nonlinear relationship between customer concentration and risk-taking, corporate policies and firm performance. Evidence shows that the effect of customer concentration in China resembles an inverted U-shaped curve and major customers are crucial in financial and investment policies. Our results help to provide a broader perspective on the role of major customers, giving a deep explanation about the role of customer concentration in corporate governance.

Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0259689 (text/html)
https://journals.plos.org/plosone/article/file?id= ... 59689&type=printable (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:plo:pone00:0259689

DOI: 10.1371/journal.pone.0259689

Access Statistics for this article

More articles in PLOS ONE from Public Library of Science
Bibliographic data for series maintained by plosone ().