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Customer concentration and corporate financialization: Evidence from non-financial firms in China

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  • Su, Kun
  • Zhao, Yan
  • Wang, Yinghui

Abstract

This study investigates the potential impact of customer concentration on corporate financialization using a sample of Chinese non-financial listed firms. The findings reveal a positive correlation between customer concentration and a supplier’s level of financialization. Customer concentration can drive corporate financialization by amplifying the operating risks suppliers face, diminishing their operational efficiency, and weakening external oversight from other stakeholders. Furthermore, supplementary research indicates that the previously mentioned positive influence diminishes when suppliers are state-owned, have pronounced financing constraints, operate within less competitive industries or regions characterized by higher levels of financial marketization, and/or encounter elevated economic policy uncertainty. The implications of our findings extend to enriching the existing body of literature concerning customer-supplier relationships. Moreover, our study offers valuable insights for future investigations into the governance mechanisms underlying corporate financialization.

Suggested Citation

  • Su, Kun & Zhao, Yan & Wang, Yinghui, 2024. "Customer concentration and corporate financialization: Evidence from non-financial firms in China," Research in International Business and Finance, Elsevier, vol. 68(C).
    • Handle: RePEc:eee:riibaf:v:68:y:2024:i:c:s0275531923002854
    DOI: 10.1016/j.ribaf.2023.102159
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    Cited by:

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    3. Wang, Hanying & Qi, Ju & Li, Zhuohua & Sensoy, Ahmet & Xing, Hongwei, 2024. "Excessive financialization and “Original Sin Theory”: Redemption from corporate reputation," Research in International Business and Finance, Elsevier, vol. 70(PA).

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    More about this item

    Keywords

    Chinese non-financial listed firms; Customer concentration; Corporate financialization; Supply chain governance;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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