Research On The Impact Of Customer Concentration On Enterprise Default Risk

Debt default is considered a key factor in causing systemic financial risks,which not only seriously damages the operation of enterprises,but also poses a serious threat to financial security and social stability.The Central Conference made it clear that we need to further reform the financial system,increase the proportion of direct financing,but also establish a sound financial regulatory mechanism to ensure that systemic financial risks do not occur.Since the end of the "Evergreen Solar" default in 2014,the number of defaulted companies and the amount involved in credit bond defaults in the bond market has increased sharply,seriously affecting the stability and development of the market.As of December 31,2022,the total amount of credit bond defaults in China’s bond market has exceeded RMB 150 billion for four consecutive years.The bond market,as an important part of the capital market,is an important channel for enterprises to obtain direct financing.Frequent default events seriously affect the stability of the market economy and harm the vital interests of investors.Therefore,how to effectively prevent and reduce the risk of corporate debt default has become an important topic in the current market economy.Customers are external stakeholders and important resource providers for businesses,exerting significant influence on the business decisions,financing costs,and profitability of supplier companies.Especially in the context of economic globalization,cooperation and division of labor relationships between enterprises in different positions in the value chain are becoming increasingly close.Enterprises continuously transform their production organization and integrate their supply chains to promote stable supply and sales relationships and gain long-term competitive advantages.Domestic and foreign scholars’ research on the economic consequences of customer concentration mainly reflects the effects on revenue and risk.On the one hand,close cooperation and benign competition between supplier enterprises and major customers on the supply chain,mutual investment and supply chain integration,and the establishment of closer partnerships can improve enterprise performance and value.On the other hand,major customers may exploit their strong bargaining power to squeeze suppliers,demanding commercial credit beyond normal levels and making proprietary asset investments,thereby increasing business risks and uncertainty.Therefore,customer concentration has a significant impact on a company’s default risk.This paper takes China’s A-share listed companies from 2009 to 2019 as research samples to empirically study the impact of customer concentration on corporate default risk.The results show that:(1)The higher the concentration of corporate customers,the greater the risk of debt default.(2)The heterogeneity study found that in the years with high environmental uncertainty,the industries with fierce market competition and the enterprises with low customer relationship stability,customer concentration has a more significant impact on enterprise default risk.(3)The study of intermediary effect shows that commercial credit and financing constraints play a partial intermediary role between customer concentration and corporate debt default risk.The innovations of this paper are as follows: First,it deeply analyzes the impact of customer concentration ratio on enterprise default risk,clarifies the internal mechanism,provides decision-making support for China to effectively solve enterprise default risk,and also enriches the literature on customer concentration ratio and enterprise default risk;Second,starting from the macro,meso and micro dimensions,we further discussed the heterogeneous regulatory effect of different factors related to environmental uncertainty,product market competition,customer volatility and other factors on the relationship between customer concentration ratio and corporate default risk,refined the granularity of the study,and pushed the analysis from the overall level to a more refined level.