Customer Concentration and Income Smoothing Activities
研究发现客户集中度越高，管理层越少进行收入平滑，因为供应商与客户间的私下信息共享降低了平滑动机；关系越长，平滑越少。
We examine how customer concentration affects managers’ income smoothing incentives to signal their private information about risk and future earnings. We find a negative relation between customer concentration and income smoothing, suggesting that improved information sharing from suppliers to customers through private channels reduces managers’ incentives to smooth earnings. To mitigate endogeneity issues, we perform (a) a change in variables analysis, (b) a propensity score matching approach, and (c) a two-stage least squares regression analysis. Finally, we document that managers’ income smoothing activities decrease as the length of the relationship between a supplier and its major customers increases, corroborating our main findings. Prior studies have paid relatively little attention to the effects of various stakeholders, especially customers, on managers’ income smoothing activities. Our study fills this void in the literature by illustrating that customer concentration is an important determinant of income smoothing incentives.