Author

Chieh Lin

Date of Award

8-4-2023

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Accounting

Advisor(s)

Johann Comprix

Keywords

Credit ratings;Customer-Supplier Relationship;Disclosure

Subject Categories

Accounting | Business

Abstract

This research investigates the effect of customer concentration on credit ratings. I find that credit rating agencies consider customer concentration a risk and incorporate the risk factor into their credit rating process. Firms with a higher customer concentration base are likely to get lower credit ratings. The impact of losing a major customer is severe for firms with concentrated customer bases. These firms are more likely to suffer from decreasing cash flow due to losing a major customer. I also examine several possible factors that could impact the relationship. Overall, my finding suggests that customer concentration is an essential factor when credit rating agencies assess the creditworthiness of a firm.

Access

Open Access

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