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Customer Concentration and Information Transparency: Evidence From China

Author

Listed:
  • Lili Ren
  • Chunling Li
  • Ruijun Zhang
  • Runsen Yuan
  • Nosherwan Khaliq

Abstract

Information transparency plays a vital role for developing capital markets. Using data of A-share listed companies from 2007 to 2020, this study examined the impact of customer concentration on corporate information transparency from a supply chain perspective. It suggests that a significant negative correlation exists between customer concentration and information transparency. Customer concentration affects the quality of corporate information disclosures. Through the mechanism test, the impact of customer concentration on corporate information transparency is based on the risk effect rather than the substitution effect of private information on public information. Research on regulatory effects points out that a poor internal information environment aggravates the negative relationship between customer concentration and information transparency. However, media supervision and a higher marketization process alleviate the adverse effects of customer concentration on information transparency. This study indicates that firms with a higher customer concentration have a higher risk of information disclosure, which provides a reference point for investors for making investment-related decisions and for the capital market supervision department for formulating information disclosure policies.

Suggested Citation

  • Lili Ren & Chunling Li & Ruijun Zhang & Runsen Yuan & Nosherwan Khaliq, 2023. "Customer Concentration and Information Transparency: Evidence From China," SAGE Open, , vol. 13(4), pages 21582440231, November.
    • Handle: RePEc:sae:sagope:v:13:y:2023:i:4:p:21582440231208615
    DOI: 10.1177/21582440231208615
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    References listed on IDEAS

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