Research On The Relationship Between Customer Concentration And Stock Price Collapse Risk

In June 2018,234 stocks of Shanghai and Shenzhen stock market were included in the MSCI index.Investors called the event "MSCI inclusion of A shares".This event marks that the development of China’s stock market has gained the attention of the international capital.However,the crash of A shares in 2008 and 2015 shows that China’s stock market is still unstable.At the Nineteenth National Congress,President Xi pointed out that China’s economy should not only focus on the growth rate,but also on the quality of growth,because only high-quality economic growth can reduce the risks in economic development.Thus to find the influence factors of share price collapse and how to prevent the stock market crash are two problems that need to be solved urgently at the present stage of China’s development.Value investment theory holds that the collapse of stock price results from the fact that the value of the enterprise itself is lower than the stock price of the enterprise.After studying a large number of domestic and foreign literatures on the risk of stock price collapse,we find that few scholars study the relationship between customers,an important stakeholder,and the risk of stock price crash.Therefore,this thesis chooses customer concentration as explanatory variable and takes all listed companies in A-share market from 2008 to 2016 as research samples to analyze the relationship between customer concentration and share prices collapse.Under the background of China’s national conditions,we divide all samples into state-owned group and private group to test whether the nature of enterprises has an impact on the relationship between them.Then,this thesis uses intermediary effect model to analyze the transmission path of customer concentration and stock price crash risk which based on Accounting Conservatism measurement index C_SCORE,performance improvement index Tobinq caused by supply chain integration and enterprise comprehensive risk change index DTLt_DTLt-1.The thesis studies whether the three paths of accounting conservatism,business performance and enterprise comprehensive risk change have a conductive effect on customer concentration and stock price crash risk.After examining the intermediary effect of the three paths,in order to provide further evidence for the transmission path mentioned above,this thesis further divides all samples into eight groups to examine according to the level of external institutional environment,market competition,accounts receivable turnover rate and inventory turnover rate.The results of this study show that there is a significant negative correlation between customer concentration and stock price crash risk in A-share market.The effect of customer concentration on the risk of stock price crash is more significant in private enterprises,while the negative correlation between them is not significant in state-owned enterprises.The results of intermediary effect show that accounting conservatism and the improvement of business performance are two transmission paths of the relationship between customer concentration and risk of stock price crash.Through further grouping empirical research,we find that there is no significant negative correlation between customer concentration and stock price crash risk in the group with higher external institutional environment and lower product market level,while in the group with lower external institutional environment and higher product market level,customer concentration can restrain the risk of stock price collapse.There is no significant negative correlation between customer concentration and stock price crash risk in the group with higher accounts receivable turnover ratio and higher inventory turnover ratio,but in the group with lower accounts receivable turnover ratio and lower inventory turnover ratio,customer concentration can restrain stock price crash risk.