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Research Seminars

Keeping the Eye on the Biggest Ball? Customer Concentration, Firm R&D Investment and Moderation Effects

Wednesday, 30 June 2021
10:00 to 11:00
Shan Zhao (PhD candidate, Nankai University; visiting PhD student, Durham University)
Virtual seminar

Speaker: Shan Zhao (PhD candidate, Nankai University; visiting PhD student, Durham University)
Virtual seminar by Marketing and International Business (MIB) research centre

Abstract: Building on resource dependence theory (RDT) and attention-based view (ABV), this research examines the impact of customer concentration on firm R&D investment and the conditional factors. We argue a firm with heavy reliance on a restricted number of major customers will have a lower level of firm R&D investment due to its customers’ greater bargaining power and efficiency of R&D. Moreover, the external environmental factors (competition intensity, IPR protection) and the internal cognitive factor (management myopia) of the firm will exacerbate the negative effect. Using a proprietary data from A-share listed firms in Shanghai and Shenzhen stock markets spanning 2008-2017 (11,231 firm-year observations), the findings confirm that (1) the degree of customer concentration is negatively associated with firm R&D investment, and (2) the adverse impact of customer concentration on firm R&D investment intensifies in the context of higher competition intensity, stronger IPR protection and more myopic management. This research adds to the customer management literature by uncovering a dark side of firms’ concentrated customer base and the situational factors that strengthen this effect. It also marks an early statistically empirical analysis of ABV-based prediction.

Bio: Shan Zhao is a Ph.D. candidate in Nankai University Business school, and a visiting doctoral student in Durham University Business school. She was a recipient of U.S. Committee of 100’s Leadership Scholarship Prize as well as the Zhou Enlai Scholarship, the highest level of recognition of students at Nankai University. Her research focuses on the Strategy management and Innovation. She has published four papers during her second year of doctoral study.

Keeping the Eye on the Biggest Ball? Customer Concentration, Firm R&D Investment and Moderation Effects

Wednesday, 30 June 2021
10:00 to 11:00
Shan Zhao (PhD candidate, Nankai University; visiting PhD student, Durham University)
Virtual seminar

Speaker: Shan Zhao (PhD candidate, Nankai University; visiting PhD student, Durham University)
Virtual seminar by Marketing and International Business (MIB) research centre

Abstract: Building on resource dependence theory (RDT) and attention-based view (ABV), this research examines the impact of customer concentration on firm R&D investment and the conditional factors. We argue a firm with heavy reliance on a restricted number of major customers will have a lower level of firm R&D investment due to its customers’ greater bargaining power and efficiency of R&D. Moreover, the external environmental factors (competition intensity, IPR protection) and the internal cognitive factor (management myopia) of the firm will exacerbate the negative effect. Using a proprietary data from A-share listed firms in Shanghai and Shenzhen stock markets spanning 2008-2017 (11,231 firm-year observations), the findings confirm that (1) the degree of customer concentration is negatively associated with firm R&D investment, and (2) the adverse impact of customer concentration on firm R&D investment intensifies in the context of higher competition intensity, stronger IPR protection and more myopic management. This research adds to the customer management literature by uncovering a dark side of firms’ concentrated customer base and the situational factors that strengthen this effect. It also marks an early statistically empirical analysis of ABV-based prediction.

Bio: Shan Zhao is a Ph.D. candidate in Nankai University Business school, and a visiting doctoral student in Durham University Business school. She was a recipient of U.S. Committee of 100’s Leadership Scholarship Prize as well as the Zhou Enlai Scholarship, the highest level of recognition of students at Nankai University. Her research focuses on the Strategy management and Innovation. She has published four papers during her second year of doctoral study.