Customer Concentration, Institutional Environment And Cash Holding Level

Now,product market competition is fierce and market environment is complex and changeable.The past single-nuclear development mode has not adapted to such environment.More and more enterprises realize that in order to occupy the dominant position in the fierce market competition,they need to establish long-term and stable cooperation relationship with stakeholders.This kind of cooperation is conducive to resources integration and information sharing between the upstream and downstream of the supply chain.And enterprises can timely access to the information about prices of raw materials,production technology and products demands,and enhance the competitive strength.Large customer is an important link in the supply chain and a kind of hidden resources of enterprises.Establishing cooperative relationship with major customers helps enterprises to stabilize sales,reduce costs,and enhance enterprise value.However,over concentrated customer relationships(High customer concentration)will bring new problems and risks to enterprises,increase the uncertainty of the future,and have an important impact on the financial activities of enterprises.The relationship between the concentration of customers and the level of cash holdings will also be affected by the institutional environment.The difference of institutional environment makes enterprise's ability to resist risks different,which to a certain extent will affect the role of cash in the coordination of customer relationship.Under this background,this paper discusses the influence of customer concentration on the cash holding level,and combined with the institutional environment of China's unbalanced regional development.This paper combined macro institutional environment with Micro customer relationship in order from a new perspective to enrich our study of the factors influencing the level of cash holdings in China,and provide important enlightenment to supply chain management and cash holding decision for non-state enterprises.Based on this,this paper takes the Shanghai and Shenzhen A shares listing Corporation as a sample in 2011—2015,and empirically tests the influence of customer concentration and institutional environment on the cash holdings.Firstly,this paper systematically expounds the basic theory of customer concentration,institutional environment and cash holding level,and then puts forward the research direction of this paper,and then raises the research perspective of this paper.Then,on the basis of theoretical analysis,the research hypothesis about the impact of institutional environment and customer concentration on cash holdings is put forward.Finally,we come to a conclusion in this paper through the analysis of relevant: due to the precautionary motive and the commitment motive,customer concentration is positively correlated with corporate cash holdings;compared to state-owned enterprises,the relationship between customer concentration and cash holdings is more positive in non-state enterprises which have less stable customer relationships and more difficulties in financing;the intense completion will strengthened the positive correlation between costumer concentration and cash holdings;the better the institutional environment of non-state enterprises is,the weaker the positive correlation between customer concentration and cash holdings is.