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Customer Concentration, Economic Policy Uncertainty and Enterprise Sustainable Innovation

Author

Listed:
  • Tingyong Zhong

    (School of Accountancy, Chongqing Technology and Business University, Chongqing 400067, China)

  • Yimeng Zuo

    (School of Accountancy, Chongqing Technology and Business University, Chongqing 400067, China)

  • Fangcheng Sun

    (School of Accountancy, Chongqing Technology and Business University, Chongqing 400067, China)

  • Jeoung Yul Lee

    (National Research Base of Intelligent Manufacturing Service, Chongqing Technology and Business University, Chongqing 400067, China
    School of Business Management, Hongik University, Sejong 30016, Korea)

Abstract

Few studies have addressed how customer concentration affects the decision of a firm’s research and development (R&D) strategies and then innovation outcome. Using a sample of China’s listed companies for the period from 2009 to 2017, this study investigates the relationship between customer concentration and enterprise sustainable innovations, as well as how such the relationship changes with economic policy uncertainty. The findings imply that there is a significant inverted-U-shaped relationship between customer concentration and enterprise sustainable innovations. Under a high level of economic policy uncertainty, the advantage of the customer relationship is maximized. In this context, raising customer concentration significantly promotes enterprise sustainable innovations. Customer concentration affects innovations differently as the equity properties, and locations of enterprises vary under different levels of economic policy uncertainty. Thus, the interval of customer concentration conducive to enterprise innovations differs. The results are robust to econometric techniques that control for endogeneity. Overall, our findings suggest that enterprises build and adjust the customer relationship and improve the driving mechanism for sustainable innovations.

Suggested Citation

  • Tingyong Zhong & Yimeng Zuo & Fangcheng Sun & Jeoung Yul Lee, 2020. "Customer Concentration, Economic Policy Uncertainty and Enterprise Sustainable Innovation," Sustainability, MDPI, vol. 12(4), pages 1-20, February.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:4:p:1392-:d:320249
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    Cited by:

    1. Ongsakul, Viput & Treepongkaruna, Sirimon & Jiraporn, Pornsit & Uyar, Ali, 2021. "Do firms adjust corporate governance in response to economic policy uncertainty? Evidence from board size," Finance Research Letters, Elsevier, vol. 39(C).
    2. Zhanguang Chen & Qiaowan Wang & Chao Dou & Tian Liang, 2020. "Government Background Customers and Private Enterprise Innovation from the Perspective of Supply Chain Risk Transmission," Sustainability, MDPI, vol. 12(8), pages 1-22, April.
    3. Chang Huang & Xiao Chang & Yang Wang & Nicolas Li, 2023. "Do major customers encourage innovative sustainable development? Empirical evidence from corporate green innovation in China," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 163-184, January.
    4. Wunhong Su & Liuzhen Zhang & Chao Ge & Shuai Chen, 2022. "Association between Internal Control and Sustainability: A Literature Review Based on the SOX Act Framework," Sustainability, MDPI, vol. 14(15), pages 1-30, August.
    5. Xuan Yang & Shihao Mao & Luxuan Sun & Chao Feng & Yinshuang Xia, 2022. "The Effect of Economic Policy Uncertainty on Green Technology Innovation: Evidence from China’s Enterprises," Sustainability, MDPI, vol. 14(18), pages 1-17, September.
    6. Huan Chen & Tingyong Zhong & Jeoung Yul Lee, 2020. "Capacity Reduction Pressure, Financing Constraints, and Enterprise Sustainable Innovation Investment: Evidence from Chinese Manufacturing Companies," Sustainability, MDPI, vol. 12(24), pages 1-16, December.
    7. Jiang, Xiaoxian & Jin, Ruijie & Gong, Min & Li, Mingzhu, 2022. "Are heterogeneous customers always good for iterative innovation?," Journal of Business Research, Elsevier, vol. 138(C), pages 324-334.

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