LAUSR.org creates dashboard-style pages of related content for over 1.5 million academic articles. Sign Up to like articles & get recommendations!

Customer Concentration, Managerial Ability, and Corporate Performance

Photo by huntersrace from unsplash

We examined whether and how managerial ability affects the relationship between customer concentration and corporate performance. Based on a novel measure of managerial ability, we found that customer concentration has… Click to show full abstract

We examined whether and how managerial ability affects the relationship between customer concentration and corporate performance. Based on a novel measure of managerial ability, we found that customer concentration has a significant negative effect on corporate performance, while managerial ability can mitigate this effect. The negative effect of customer concentration is only significant in the subsample of low ability and lower efficiency in asset utilization, while the moderating effect of managerial ability is significant for all levels of asset utilization efficiency and more significant for firms with a lower gross margin. The results are robust to numerous robustness tests and endogeneity concerns. Additional analysis of mechanisms shows that in addition to superior operating ability, competent managers select major customers who are more beneficial to their company and decrease the sensitivity of their research and development (R&D) investment to customers. These findings indicate that the heterogeneity of managerial ability plays an important role in the supplier–customer context when the supplier firm generally faces one or more concentrated customers.

Keywords: ability; customer concentration; corporate performance; managerial ability

Journal Title: Frontiers in Psychology
Year Published: 2022

Link to full text (if available)


Share on Social Media:                               Sign Up to like & get
recommendations!

Related content

More Information              News              Social Media              Video              Recommended



                Click one of the above tabs to view related content.