Supplier Concentration and Corporate Financialization

In the context of increasing emphasis on developing the real economy in China, how to effectively curb the phenomenon of the "deviation from the real to the virtual" in the real economy has become an important research issue. This paper analyzes the impact of supplier concentration on corporate financialization from both theoretical and empirical perspectives. The study shows that supplier concentration exacerbates corporate financialization, meaning that the higher the concentration of a company's suppliers, the higher its level of financialization. Further channel tests reveal that supplier concentration mainly affects corporate innovation through three channels: financing constraints, corporate innovation capability, and profitability volatility. Additionally, we find that the effect of supplier concentration is closely related to factors such as enterprise size, ownership structure, regional location, and customer concentration. This empirical study reveals the relationship between supplier configuration and corporate financial investment decisions, enriching the relevant literature. From a practical perspective, it provides guidance for enterprises to effectively control the scale of financialization and ensure their long-term healthy development.