Supplier And Customer Concentration And Company Innovation

Innovation is one of the important activities for the company to enhance its competitiveness,and it is also the source of power for the country's development.The existing research generally studies the determinants of innovation from the macro level of the legal system,the industrial environment,and the micro-enterprise level such as Nature of property rights.However,it is rare to analyze the impact of the relationship between enterprises and customers ? suppliers on the company's R&D innovation.In the existing research on the impact of corporate stakeholders on corporate innovation,most of them analyze it from the single perspective of customers,ignoring the perspective of overall supply chain.As the important stakeholders of the company,the customers and suppliers will have an important impact on the company's operation,financial risks and financing constraints.R&D innovation is a long-term,high-risk activity.It requires the company to invest a lot of resources in the early stage,and the company will consider the factors of its own financing constraints and risk status while conducting decisions.Therefore,the relationship between the company and its customers?suppliers will have an important effect on the company's R&D and innovation activities.This paper studies the the impact of R&D innovation from the upstream and downstream perspectives of the company.Based on the aspect of supply chain,this paper analyzes the impact of customer concentration and supplier concentration on company innovation from the perspective of financing constraints,risk factors and resource crowding,and then considers the collective effect of large customers and large suppliers on company's innovation activities in the ternary relationship.Furthermore,from the perspective of the stability of the ternary relationship,we study the relationship between supply chain integration and company innovation.Finally,this paper combines domestic and foreign literature results and China's unique national conditions to analyze from different levels of property rights,industry characteristics and financial market environment.In the empirical test section,this paper takes the data of China's manufacturing listed companies in 2010-2015 as a sample,and uses the sales(purchasing)ratio of the top five customers(the top five suppliers)and the sum of sales(purchasing)squares of the top five customers(suppliers)to measure the concentration of customers(suppliers),uses the R&D investment and the number of patent outputs to measure the degree of innovation and measures supply chain integration with the ratio of the meanand variance of the top five supply and sales ratios.Company innovation requires a lot of resources,and it is a risky long-term process.When the concentration of customers and suppliers is high,large customers and suppliers will use their own powerful bargaining power to deprive enterprises.At the same time,if the company loses a large customer or a large supplier,it will face huge operational risks.At this time,the financing constraints and risk factors faced by the company will inhibit the motivation and ability of the company to carry out innovation activities.However,when the ternary relationship between the company and the upstream and downstream is relatively stable,supply chain integration can reduce the risks faced by the company,improve financial performance,promote knowledge sharing,and promote company innovation.The empirical results show that the higher the concentration of customers or the concentration of suppliers,the lower the degree of R&D innovation of enterprises.However,in the ternary relationship,when the concentration of the customers and suppliers of the company is high,the willingness and ability of the company to carry out research and development and innovation are enhanced.And,when the ternary relationship is relatively stable and the supply chain integration is high,it is conducive to promoting company innovation.This paper studies the impact of the relationship between enterprises and its customers and suppliers on the company's innovation activities from the perspective of supply chain which enriches the relevant literature on the factors influencing the company's innovation and provides a new research idea for related research.At the same time,the research of this paper can provide empirical support for the influence of supplier and customer concentration on enterprise innovation,thus providing a certain empirical basis for enterprise managers to maintain the relationship with its upstream and downstream,formulate innovation strategies.