Co-authored Paper by Professors Qian Xianhang and Li Xinyu Published in International Authoritative Journal JIMF

Recently, the co-authored paper Concentrated Customers: A Blessing or a Curse for Tunneling Prevention? by Professor Qian Xianhang, doctoral candidate Liu Yewei, and Associate Researcher Li Xinyu from the School of Economics, Shandong University, was published in Journal of International Money and Finance, an international authoritative journal.

The tunneling behavior of controlling shareholders, that is, controlling shareholders transfer corporate resources for personal interests at the expense of other shareholders, is a difficult problem in corporate governance in emerging market countries including China. Existing literature has examined this from multiple perspectives, but ignored the role of customers, an important stakeholder.

Using data of listed companies in China, this paper tests the impact of customer concentration on tunneling by controlling shareholders. The study finds that firms with higher customer concentration have more serious tunneling behaviors, and concentrated customers are conducive to controlling shareholders' tunneling behaviors. This paper tests its impact mechanism and finds that the increase of customer concentration increases firms' excess cash holdings and information opacity, thus triggering tunneling behaviors. The research results show that tunneling behaviors driven by customer concentration increase firms' agency costs and financial risks and reduce firm value.

This study highlights the impact of customers as stakeholders on tunneling by controlling shareholders, deepens the research on the governance role of stakeholders, identifies customer concentration as a new factor to predict tunneling by controlling shareholders, and provides a reference for regulators' ex-ante supervision of tunneling behaviors and investors' risk management.

Qian Xianhang is a Professor and Ph.D. Supervisor at the School of Economics, Shandong University, a Young Expert of Taishan Scholar Program in Shandong Province, and a "Excellent Young Scholar in Liberal Arts" and Qilu Young Scholar of Shandong University. His research field is corporate finance and corporate governance. He has published more than 50 papers in journals such as Economic Research Journal (3 papers), Management World, China Economic Quarterly, Journal of Financial Research (5 papers), China Industrial Economics, Financial Management, and Journal of International Money and Finance (3 papers). His research achievements have won the first Sun Yefang Financial Innovation Award, the Second Prize of the 10th National Excellent Financial Paper, the First Prize of Shandong Provincial Social Science Excellent Achievements, and the New Talent Award of Shandong Provincial Social Science Disciplines. He has presided over projects such as the National Natural Science Foundation of China, the National Social Science Fund of China, and the Humanities and Social Sciences Fund of the Ministry of Education.

Li Xinyu is an Associate Researcher at the School of Economics, Shandong University, and a Future Plan Scholar of Shandong University. His research field is corporate finance and capital market. He has published more than 10 academic papers in journals such as Management World, China Industrial Economics, Journal of Management Science, Journal of Corporate Finance, Journal of International Money and Finance, and The British Accounting Review. He has presided over projects such as the National Natural Science Foundation of China and the Natural Science Foundation of Shandong Province.