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Can customer concentration affect corporate ESG performance?

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  • Zheng, Siyu
  • Zhang, Qihao
  • Zhang, Pengdong

Abstract

Large customers are a primary source of economic benefits for enterprises; however, excessive reliance on them may have negative impacts on corporate performance. This study utilizes data from A-share listed companies in Shanghai and Shenzhen between 2010 and 2020 to investigate the effect of customer concentration on corporate ESG performance. The results indicate that customer concentration significantly reduces ESG performance by inhibiting firms' operating cash flow and innovation ability. Further analysis reveals that non-state-owned firms are more adversely affected than state-owned ones, while lower market competitiveness, younger executive age, and larger firm size lead to stronger reductions in ESG performance. These findings provide new insights into research on customer concentration and expand the literature on factors influencing ESG.

Suggested Citation

  • Zheng, Siyu & Zhang, Qihao & Zhang, Pengdong, 2023. "Can customer concentration affect corporate ESG performance?," Finance Research Letters, Elsevier, vol. 58(PB).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pb:s1544612323008048
    DOI: 10.1016/j.frl.2023.104432
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    References listed on IDEAS

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    Cited by:

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    3. Che, Jiayi & Chen, Jinsong, 2024. "Empirical study on marketing investment and business innovation—A case analysis based on small and medium enterprises," Finance Research Letters, Elsevier, vol. 69(PB).
    4. Yu, Xiaojun & Li, Qiang & Zhang, Lin, 2024. "Major government customer and corporate environmental responsibility: Evidence from China," Journal of Business Research, Elsevier, vol. 183(C).
    5. Zhang, Kai & Wan, Shan & Zhou, Yuehui, 2024. "Executive compensation, internal governance and ESG performance," Finance Research Letters, Elsevier, vol. 66(C).
    6. Chen, Chaofan & Li, Wen-Bo & Zhang, Heng, 2024. "How do property rights affect corporate ESG performance? The moderating effect of green innovation efficiency," Finance Research Letters, Elsevier, vol. 64(C).
    7. Che, Shuai & Tao, Miaomiao & Silva, Emilson & Sheng, Mingyue Selena & Zhao, Congyu & Wang, Jun, 2024. "Financial misallocation and green innovation efficiency: China's firm-level evidence," Energy Economics, Elsevier, vol. 136(C).
    8. Zhang, Yanan & Zhang, Xiaoyu, 2024. "Top management team functional diversity and ESG performance," Finance Research Letters, Elsevier, vol. 63(C).
    9. Li, Na & Li, Guo & Xue, Jing, 2025. "Does ESG protect firms equally during crises? The role of supply chain concentration," Omega, Elsevier, vol. 130(C).

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