Can customer concentration affect corporate ESG performance?

Large customers are a primary source of economic benefits for enterprises; however, excessive reliance on them may have negative impacts on corporate performance. This study utilizes data from A-share listed companies in Shanghai and Shenzhen between 2010 and 2020 to investigate the effect of customer concentration on corporate ESG performance. The results indicate that customer concentration significantly reduces ESG performance by inhibiting firms' operating cash flow and innovation ability. Further analysis reveals that non-state-owned firms are more adversely affected than state-owned ones, while lower market competitiveness, younger executive age, and larger firm size lead to stronger reductions in ESG performance. These findings provide new insights into research on customer concentration and expand the literature on factors influencing ESG.