| Innovation is critical to the long-term viability of the national economy because it is the primary driver of economic development.The Fifth Plenary Session of the 19 th Central Committee also highlighted the significance of innovation and clearly placed it at the heart of China’s socialist modernisation.Enterprises are both the mainstay of the market and the primary source of innovation.Corporate innovation provides a powerful driving force in an innovation-led development strategy involving all factors.Customers,as important stakeholders of the company,are the main purchasers of new products,are the direct source of the company’s revenue and determine the investment of funds for corporate innovation;therefore,corporate R&D innovation is heavily influenced by large customers.The relationship between customer concentration,which reflects a firm’s customer relationships and dependence on them,remains to be explored,as research findings on the impact of customer concentration on firm innovation are inconsistent.Corporate innovation is an investment activity that requires significant ongoing cash and is strongly influenced by its cash flow position.The degree of concentration of customers,the main source of a firm’s operating income,can have a significant impact on a firm’s cash flow position.As such,cash flow uncertainty,which reflects a company’s cash flow profile,is linked to customer concentration and corporate innovation.Based on this,this paper will explore how customer concentration affects firm innovation.The possible mechanisms of customer concentration on firm innovation are examined.Cash flow uncertainty is introduced to investigate the relationship between customer concentration,cash flow uncertainty and firm innovation.After combing through the national and international literature on related research,this paper presents a research hypothesis based on the theoretical foundations.Then,a rational model is constructed and empirically tested and analysed with a sample of companies listed in Shanghai and Shenzhen A-shares from 2013 to 2020.The differences in the impact relationship between different equity firms were further explored.It is found that:(1)Customer concentration has a negative impact on firm innovation,and this impact is more pronounced in non-state enterprises;(2)firms with high customer concentration have higher cash flow uncertainty;(3)high cash flow uncertainty hinders corporate technological innovation;(4)cash flow uncertainty,as a mediating variable between customer concentration and corporate innovation,plays a partial mediating effect between the two.In this paper,robustness tests are also performed to increase the credibility of the empirical results.Finally,based on the findings,recommendations are made on how to address the negative impact of customer concentration on firm innovation,as well as the study’s limitations and the outlook for future research. |
