Abstract:
This paper discusses the relationship between customer-based concentration and bond yield spread in secondary market. The result shows customer-based concentration improves bond yield spread, which means customer-based concentration has risk effects. The positive relationship between customer-based concentration and bond yield spread exists when firms’ trade credit and customer relationship have higher risk. The firm risk can also accelerate customer risk effects. In the end, this paper finds that firms with a higher customer-based concentration will have higher sales volatility and higher bad debt risk in the future. The results contribute to literature on yield spread and customer relationship.
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