Customer Concentration and Abnormal Management Tone: Perspectives From Private Information Transmission

This study examines the relation between customer concentration and abnormal management tone using a sample of Chinese A‐share listed firms from 2007 to 2021. We find that customer concentration is negatively associated with abnormal management tone. Mechanism analyses suggest that firms with higher customer concentration rely more on private information channels to communicate with their major customers. Cross‐sectional analyses show that this negative association is stronger when firms provide more trade credit or have higher inventory management efficiency, but does not vary significantly with internal or external monitoring. Overall, this study contributes to a better understanding of the role of customer relationships in firms' qualitative disclosure strategies.