Your browser does not support the PubReader view.
Go to this page to see a list of supporting browsers.
Korean Academic Society of Business Administration
[ Article ]
korean management review - Vol. 51, No. 5, pp.1243-1269
ISSN: 1226-1874 (Print)
Print publication date 31 Oct 2022
Received 01 Aug 2022 Revised 18 Aug 2022 Accepted 23 Aug 2022
DOI: https://doi.org/10.17287/kmr.2022.51.5.1243

고객집중도와 주가폭락위험: 공급사가 가족기업인 경우 조절효과

Seun-Young Park ; Sung Whan Park
(First Author) Assistant Professor, School of Public Administration and Research Institute of Public Affairs, Kyungpook National Univ, Republic of Korea sypark13@knu.ac.kr
(Co-Author) Professor of College of Economics and Business Administration at Hanbat National University psh630@hanbat.ac.kr
The Moderating Effect of Family Control on the Relationship Between Customer Concentration and Stock Price Crash Risk


Copyright 2011 THE KOREAN ACADEMIC SOCIETY OF BUSINESS ADMINISTRATION
This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Upon adoption of K-IFRS in 2011, Korean firms are required to disclose the existence of a major customer that account for 10 percent or more of the firm's revenue (hereinafter CC). This study investigates the relationship between CC and the firm's future stock price crashes. Further, we analyze whether the relationship between them is attenuated in case of family-controlled firms. Using the non-financial firms listed in KOSPI between years 2011 to 2017, we find that CC is positively associated with future stock price crashes. Further analysis reveals that the positive relationship between them is negatively moderated when the supply firms are controlled by family shareholders. Overall, the evidence suggests that the firms with a more concentrated customer-base are likely to withhold bad news, possibly leading to future stock price crashes. On the other hand, the positive relationship between them can be attenuated in family firms owing to their unique characteristics. Under the recent management paradigm shift from shareholder-capitalism to stakeholder-capitalism, the suppliers’ risk management can be an important issue for a firm’s sustainability. By providing the association between CC and suppliers’ future crash risk, this study may shed light on the practice of firm’s implementation of stakeholder-oriented management.

Keywords:

Customer concentration, Stock price crash risk, Family firms, Stakeholder-capitalismt

References

  • 고윤성, 박선영(2014), “자발적 저배당 및 배당생략 기업의 특성 및 성과,” 회계학연구, 39(5), pp.1-40.
  • 강선민(2012), “수ㆍ위탁기업의 경영성과 분석 - 조선, 자동차, 전기전자의 거래관계를 고려하여,” 대한경영학회, 25(4), pp.2157-2183.
  • 김소연(2018), “협력업체의 고객기업에 대한 매출의존도와 현금보유,” 재무연구, 31(2), pp.157-185.
  • 김소연, 신현한(2015), “산업선두 대기업의 납품업체 성과분석,” 재무연구, 28(3), pp.417-452.
  • 심상규(2011), “중소기업의 대기업 매출비율과 수익성간의 관계,” 중소기업연구, 33(4), pp.159-175.
  • 장진호, 신현한(2005), “최고경영자 교체에 영향을 미치는 요인분석: 경영성과, 전문경영자, 대규모기업집단,” 경영학연구, 34(1), pp.289-311.
  • 주자옥, 권순창(2020), “고객집중도가 발생액이익조정과 실제이익조정에 미치는 영향,” 한국회계학회 학술발표논문집, pp.1-16
  • 주재형, 정아름, 정도진, 박성환(2021), “주요고객 매출집중도가 이익조정 및 기업위험에 미치는 영향,” 경영학연구, 50(3), pp.745-776.
  • 최종서, 곽영민(2010), “최고경영자 교체유형과 이익조정 행태간의 관련성,” 회계학연구, 36(2), pp.75-131.
  • Anderson, R. and D. Reeb(2003), “Founding Family Ownership and Firm Performance: Evidence from the S&P 500,” Journal of Finance, 58, pp.1301-1328. [https://doi.org/10.1111/1540-6261.00567]
  • Ak, B. K., and P. N. Patatoukas(2016), “Customer-base Concentration and Inventory Efficiencies: Evidence from the Manufacturing Sector,” Production and Operations Management, 25(2), pp.258-272. [https://doi.org/10.1111/poms.12417]
  • Albuquerque, A., G. Papadakis, and P. Wysocki (2014), “The Impact of Risk on CEO Equity Incentives: Evidence from Customer Concentration,” Working paper.
  • Bleck, A., and X. Liu, (2007), “Market Transparency and the Accounting Regime,” Journal of Accounting Research, 45(2), pp.229-256. [https://doi.org/10.1111/j.1475-679X.2007.00231.x]
  • Benmelech, E., E. Kandel, and P. Veronesi(2010), “Stock-based Compensation and CEO (dis) Incentives,” Quarterly Journal of Economics, 125(4), pp.1769-1820. [https://doi.org/10.1162/qjec.2010.125.4.1769]
  • Bowen, R. M., L. DuCharme, and D. Shores(1995), “Stakeholders’ Implicit Claims and Accounting Method Choice,” Journal of Accounting and Economics, 20(3), pp.255-295. [https://doi.org/10.1016/0165-4101(95)00404-1]
  • Campello, M. and J. Gao(2017), “Customer Concentration and Loan Contract Terms,” Journal of Financial Economics, 123(1), pp.108-136. [https://doi.org/10.1016/j.jfineco.2016.03.010]
  • Chen, S., X. Chen, and Q. Cheng(2008), “Do Family Firms Provide More or Less Voluntary Disclosure?,” Journal of Accounting Research, 46(3), pp.499-536. [https://doi.org/10.1111/j.1475-679X.2008.00288.x]
  • Chen, Y., G. Hu, and J. Yao(2019), “Customer Concentration, Bad News Withholding, and Stock Price Crash Risk,” Working paper.
  • Cohen, D., A. Dey, and T. Lys(2008), “Real and Accrual-based Earnings Management in the Pre and Post-Sarbanes Oxley Periods,” The Accounting Review, 82(3), pp.757-787. [https://doi.org/10.2308/accr.2008.83.3.757]
  • Cornell, B. and A. C. Shapiro(1987), “Corporate Stakeholders and Corporate Finance,” Financial Management, 16(1), pp.5-14. [https://doi.org/10.2307/3665543]
  • Davis, G. F., and J. A. Cobb(2010), “Corporations and Economic Inequality Around the World: The Paradox of Hierarchy,” Research in Organizational Behavior, 30, pp.35-53. [https://doi.org/10.1016/j.riob.2010.08.001]
  • Dhaliwal, D., J. S. Judd, M. Serfling, and S. Shaikh (2016), “Customer Concentration Risk and the Cost of Equity Capital,” Journal of Accounting and Economics, 61(1), pp.23-48. [https://doi.org/10.1016/j.jacceco.2015.03.005]
  • Gómez-Mejia, L., K. Haynes, M. Núñez-Nickel, K. Jacobson, and J. Moyano-Fuentes(2007), “Socioemotional Wealth and Business Risks in Family-controlled Firms: Evidence from Spanish Olive Oil Mills,” Administrative Science Quarterly, 52, pp.106-137. [https://doi.org/10.2189/asqu.52.1.106]
  • Huang, H. H., G. J. Lobo, C. Wang, and H. Xie (2016), “Customer Concentration and Corporate Tax Avoidance,” Journal of Banking and Finance, 72, pp.184-200. [https://doi.org/10.1016/j.jbankfin.2016.07.018]
  • Hui, K. W., S. Klasa, and P. E. Yeung(2012), “Corporate Suppliers and Customers and Accounting Conservatism,” Journal of Accounting and Economics, 53(1), pp.115-135. [https://doi.org/10.1016/j.jacceco.2011.11.007]
  • Jin, L. and S. C. Myers(2006), “R2 Around the World: New Theory and New Tests,” Journal of Financial Economics, 79(2), pp.257-292. [https://doi.org/10.1016/j.jfineco.2004.11.003]
  • Kim, S. Y., S. S. Park, and H. H. Shin(2017), “Do Family Firms Care For Their Stakeholders? Evidence from the Customer-supplier Relationship,” Working paper.
  • Kim, J. B., Z. Wang, and L. Zhang(2016), “CEO Overconfidence and Stock Price Crash Risk,” Contemporary Accounting Research, 33(4), pp.1720-1749. [https://doi.org/10.1111/1911-3846.12217]
  • Kim, J. B., Y. Li, and L. Zhang(2011), “CFOs versus CEOs: Equity Incentives and Crashes,” Journal of Financial Economics, 101(3), pp.713-730. [https://doi.org/10.1016/j.jfineco.2011.03.013]
  • Kim, J. B. and L. Zhang(2016), “Accounting Conservatism and Stock Price Crash Risk: Firm-level Evidence,” Contemporary Accounting Research, 33(1), pp.412-441. [https://doi.org/10.1111/1911-3846.12112]
  • Kothari, S. P., S. Shu, and P. D. Wysocki(2009), “Do Managers Withhold Bad News?,” Journal of Accounting Research, 47(1), pp.241-276. [https://doi.org/10.1111/j.1475-679X.2008.00318.x]
  • Klein, B., R. Crawford, and A. Alchian(1978), “Vertical Integration, Appropriable Rents and the Competitive Contracting Process,” Journal of Law and Economics, 21, pp.297-326 [https://doi.org/10.1086/466922]
  • Krishnan, G. V., P. N. Patatoukas, and A. Y. Wang (2019), “Customer-base Concentration: Implications for Audit Pricing and Quality,” Journal of Management Accounting Research, 31(1), pp.129-152. [https://doi.org/10.2308/jmar-52040]
  • Lee, S. M., P. Jiraporn, and H. Song(2020), “Customer Concentration and Stock Price Crash Risk,” Journal of Business Research, 110, pp.327-346. [https://doi.org/10.1016/j.jbusres.2020.01.049]
  • Ma, X., W. Wang, J. Wu, and W. Zhang(2020), “Corporate Customer Concentration and Stock Price Crash Risk,” Journal of Banking and Finance, 119, pp.1-50. [https://doi.org/10.1016/j.jbankfin.2020.105903]
  • Irvine, P., S. Park, and C. Yildizhan(2016), “Customer-Base Concentration, Profitability, and the Relationship Life Cycle,” The Accounting Review, 91, pp.883-906. [https://doi.org/10.2308/accr-51246]
  • Itzkowitz, J.(2013), “Customers and Cash: How Relationships Affects Suppliers’ Cash Holdings,” Journal of Corporate Finance, 19(c), pp.159-180 [https://doi.org/10.1016/j.jcorpfin.2012.10.005]
  • Raman, K. and H. Shahrur(2008), “Relationship-specific Investments and Earnings Management: Evidence on Corporate Suppliers and Customers,” The Accounting Review, 83(4), pp.1041-1081. [https://doi.org/10.2308/accr.2008.83.4.1041]
  • Schumacher, U.(1991), “Buyer Structure and Seller Performance in U.S. Manufacturing Industries,” The Review of Economics and Statistics, 73(2), pp.277-284. [https://doi.org/10.2307/2109518]
  • Snyder, C.(1996), “A Dynamic Theory of Countervailing Oower,” The RAND Journal of Economics, 27(4), pp.747-769 [https://doi.org/10.2307/2555880]
  • S. Park and S. Park(2022), “Information Shock and Dividend Policy in Family-controlled Firms: Evidence from Korea,” Emerging Markets Finance and Trade, 58(6), pp.1771-1793. [https://doi.org/10.1080/1540496X.2021.1926234]
  • Patatoukas, P.(2012), “Customer-base Concentration: Implications for Firm Performance and Capital Markets,” The Accounting Review, 87, pp.363-392. [https://doi.org/10.2308/accr-10198]
  • Porter, M. E.(1980), “How Competitive Forces Shape Strategy,” McKinsey Quarterly, (2), pp.34-50.
  • Villalonga, B., and R. Amit(2006), “How Do Family Ownership, Control and Management Affect Firm Value?,” Journal of Financial Economics, pp.385-417. [https://doi.org/10.1016/j.jfineco.2004.12.005]
  • Williamson, O.(1979), “Transaction-cost Economics: The Governance of Contractual Relations,” Journal of Law and Economics, 22, pp.233-261. [https://doi.org/10.1086/466942]
  • Wang, D.(2006), “Founding Family Ownership and Earnings Quality,” Journal of Accounting Research, 44(3), pp.619-656. [https://doi.org/10.1111/j.1475-679X.2006.00213.x]

∙ The author Seun-Young Park is currently an assistant professor of School of Public Administration, Kyungpook National University. She graduated from Ewha Womans University and received a master’s degree from KDI School of Public Policy and Management, and Ph. D. in business administration from Ewha Womans University. Major research areas include both the private and public sectors’ accounting, audit and governance.

∙ The author Sung Whan Park is currently a professor of College of Economics and Business Administration, Hanbat National University. He received a bachelors’ degree, a master’s degree, and Ph. D. in business administration from Sogang University. His primary fields of interest are analysis and improvement study of financial reporting, public sector accounting and non-profit accounting.