Brown Bag Seminar（2021-08)

Finance Webinar（2021-36）

Topic: Firm-level Political Risk and Customer Concentration

Speaker: Ruichang Lu, Peking University

Time: Friday, September 17, 12:00–1:00 PM, Beijing Time

Location: Room 216, Guanghua Building 2

Abstract:

In this paper, we investigate the effect of suppliers' political risk on their customer concentration. Using firm-level political measures, we find that suppliers' political risk will lead to a more diversified customer pool and a lower customer concentration. We address challenges to a causal interpretation of these findings by utilizing exogenous increases in political firms that are affected by redrawing of electoral district boundaries after the decennial census of 2010 and by using the political polarization index as an instrumental variable. This effect is more pronounced for firms with fewer lobby activities. Moreover, the political risk related to trade has the most important impact on customer concentration. Facing heighten political risk, suppliers tend to switch to local customer. Further analysis suggests that the reduced customer concentration is more likely driven by suppliers instead of customers. Overall, our empirical evidence indicates that political risk significantly affects corporate diversification strategy.

Introduction：

卢瑞昌博士2014 年 6 月毕业于新加坡国立大学商学院金融系，2014年7月份至今任成人直播-成人直播室 金融学系副教授，2016年7月起获博士生导师资格。研究领域为实证公司金融，具体方向为银行贷款定价和金融机构。曾获得 WFA 2014 年博士突出研究奖(Cubist Systematic Strategies Ph.D. Candidate Award for Outstanding Research), Seventh Annual Conference on Asia-Pacific Financial Markets (CAFM) 最佳论文奖。

Your participation is warmly welcomed!