Supply Chain Concentration And Enterprise Innovation

In the face of the world’s unprecedented changes in a hundred years,innovation as an important means to achieve sustainable development of enterprises,enhance innovation capacity has become an important goal of enterprises in the process of business.However,the willingness and level of innovation of enterprises will not only be influenced by their own situation,but also constrained by the characteristics of the vertical relationship of the supply chain.In order to study the influence of supply chain on corporate innovation,this paper selects the data of listed companies in the automotive manufacturing industry in China from 2017 to 2021 as the research sample to examine the relationship between supplier concentration and customer concentration and corporate innovation.The independent variables are the ratio of the top five suppliers’ purchase volume to total purchase volume and the ratio of the top five customers’ sales to total sales to represent supplier concentration and customer concentration respectively.The dependent variables are the ratio of R&D investment to revenue and the logarithm of the sum of the number of patents filed plus one to measure the innovation input and innovation output of the firm respectively.The paper also discusses the relationship between supply chain concentration and firm innovation by including suppliers and customers in the same system,grouping them according to the structural characteristics of the supply chain,and introducing the moderating variable property rights to test the moderating affect.The following conclusions were drawn from the analysis of the regression results: 1.The increase of supplier and customer concentration has a suppressive effect on the innovation input and innovation output of enterprises.2.Comparing customer concentration and supplier concentration with industry averages respectively and grouping them together,multiplying supplier concentration and customer concentration as indicators of an enterprise’s supply chain structure,it is found that different types of supply chain structures have different effects on an enterprise’s innovation behavior.3.After introducing the nature of property rights as a moderating variable,the relationship between customer concentration,supplier concentration and an enterprise’s innovation input The relationship between customer concentration,supplier concentration and enterprise innovation investment is not affected by the nature of property rights.In contrast,the inhibitory effect of customer concentration and supplier concentration on firms’ innovation output is strengthened by the introduction of the nature of property rights.The following recommendations are made in response to the above findings: 1.Enterprises should continuously optimization theirs supply chain structure,both to form cooperative relationships with upstream and downstream enterprises,and to avoid over-dependence on them.2.Enterprises should carry out innovation activities according to their own circumstances.3.The government should increase its support for non-state enterprises and help them carry out innovation activities.4.Increase the supervision of the use of innovation funds by stateowned enterprises and Emphasis should be placed on the transformation of innovation results to the ground.