The Research On Relationship Between Supply Chain Concentration And Corporate Cost Structure

The development of enterprises is not isolated.In recent years,a large number of scholars have also realized this problem.The research on the strategic decisions and financial conditions of enterprises is no longer confined to the excavation of the enterprises' own data,but starting from the perspective of supplier-enterprise-customer relationship.This thesis studies the impact of supply chain relationship on corporate financial activities by combining supply chain and financial management.It mainly studies from the influence of the following aspects:corporate cash holdings,M&A performance,dividend distribution,capital structure,earnings management and corporate performance.However,the research on the relationship between the concentration of upstream and downstream of the supply chain and the cost structure is still limited,and enterprise cost structure decision is a very important research direction in corporate finance.Based on the theory of resource dependence,this thesis uses the financial statement data of the A-share listed companies in the manufacturing industry in Shanghai and Shenzhen from 2014 to 2016 to study the relationship between the concentration of upstream and downstream and the corporate cost structure,in order to find out whether customer concentration and supplier concentration have an impact on the cost structure and how they affect the cost structure of the company.In the study,the measurement methods developed by Patatoukas in 2012 were used to build customer concentration and supplier concentration variables.The bargaining power of the supply chain is measured by the competition degree of the industry and the different power in capital ownership between the supply chain.The cost structure of the company is represented by the sensitivity of changes in costs to changes in income.GDP growth rate,asset-liability ratio,the company size and the nature of the company are used as control variables.Multiple regression analysis is used to examine the effect of the concentration of suppliers and customers on the cost structure of the company.We found that:(1)Supplier concentration and customer concentration are negatively correlated with enterprise cost structure.In particular,the higher the supplier concentration is,the more rigid the cost structure of the company becomes;the higher the customer concentration is,the more rigid the cost structure of the company becomes;(2)The better the bargaining power of the customers and the bargaining power of the suppliers,the stronger the incremental effect on the negative relationship of supply chain concentration and cost structure;(3)The control variables such as the nature of the company and the size of the company have a significant impact on the cost structure of the company.For example,the negative correlation between corporate nature and cost structure indicates that the cost structure of private enterprises is more flexible than that of state-owned enterprises;The scale of companies is positively correlated with the cost structure,indicating that the cost structure of large companies is more flexible.The empirical results also passed the robustness test.The results show that enterprises respond to the concentration of supply chain by pursuing mutual dependence and cooperation with the supply chain rather than trying to reduce the power imbalance in the tripartite relationship.Therefore,companies should comprehensively consider their own supply chain concentration and risk tolerance to formulate a cost structure strategy.Appropriately tilt to a rigid cost structure within the allowable range of operating risk,conduct supply chain relational investment,and deepen and stabilize supply chain interdependent relationships,in order to maximize profits when supply or demand is uncertain.