The effect of customer concentration on supplier sustainable growth: evidence from China

Global supply chains risks and COVID-19: Supply chain structure as a mitigating strategy for small and medium-sized enterprises

“…On the demand side of the equation, greater customer concentration may have more potential in two respects: (1) strengthening the ability of supply chain risk mitigation against demand uncertainty in disruptions, such as COVID-19, due to the increased targeting efforts towards stronger relational ties with fewer customers (Saboo et al, 2016;Wang et al, 2021), and…”

Enterprise digital transformation and customer concentration: An examination based on dynamic capability theory

“…First, this manuscript focuses on the impact of digital transformation on customer concentration at the micro-firm level and extends the existing research perspective on customer concentration by eliciting potential mechanisms from dynamic capability theory. Previous studies focused on the economic consequences of customer concentration ( Cohen and Li, 2020 ; Dhaliwal et al, 2020 ; Guo et al, 2020 ; Wang et al, 2021 ), but paid little attention to the factors influencing customer concentration ( Leung and Sun, 2021 ). Although the recent literature addresses the relationship between digital technologies and customer purchase behavior ( Hopkins, 2022 ; Kliestik et al, 2022 ; Nica et al, 2022 ), it focuses on retail business.…”

“…Traditional customer relationships prefer to be stable ( Patatoukas, 2012 ) because firms believe that major customers reduce the cost of expanding new customers and provide stable cash inflows for firms. However, existing studies confirm that the disadvantages of high customer concentration outweigh the benefits ( Cohen and Li, 2020 ; Wang et al, 2021 ). Higher customer concentration indicates stronger bargaining power of major customers ( Gosman and Kohlbeck, 2009 ).…”

“…The average ratio of sales from the top five customers of Chinese listed companies is above 30% (see Figure 1), and the heavy dependence on customers is a distinctive feature of Chinese listed companies. Unlike the positive effects of customer concentration in other countries (Patatoukas, 2012;Ak and Patatoukas, 2016), both theory and practice based on the realities in China confirm that heavy dependence on large customers raises a series of potential risks (Cohen and Li, 2020;Dhaliwal et al, 2020;Guo et al, 2020;Wang et al, 2021). In view of this, the China Securities Regulatory Commission (CSRC) focuses on the customer concentration of companies in its IPO audits of proposed listed companies, listing excessive customer concentration as its risk matter.…”

“…However, we should focus more on how the digital transformation of enterprises affects the value reshaping of supply chain relationships ( Bresciani et al, 2018 ; Matarazzo et al, 2021 ). Customer concentration, an important dimension for measuring business-customer relationships ( Patatoukas, 2012 ; Dhaliwal et al, 2020 ; Leung and Sun, 2021 ; Wang et al, 2021 ), not only affects corporate production and operation decisions ( Patatoukas, 2012 ; Guo et al, 2020 ), but also has an impact on investors’ investment decisions in the capital market ( Luo and Nagarajan, 2015 ; Cheng et al, 2020 ).…”