Customer-base Concentration and Firm Performance

Subject Areas : Management Accounting

Somayeh Rahmani ¹ , Reza Gholami Jamkarani ²

1 - دانش آموخته دوره کارشناسی ارشد، واحد قم، دانشگاه آزاد اسلامی، قم، ایران
2 - استادیار گروه حسابداری، واحد قم، دانشگاه آزاد اسلامی، قم، ایران

Received: 2016-04-08 Accepted : 2016-06-14 Published : 2016-12-21

Keywords: Customer-base concentration, Firm Performance, Refined Economic Value Added,

Abstract :

In this study relationship between customer-base concentration and company's performance is examined by three criteria namely financial (return on asset), economic (refined economic value added) and operational (inventory turnover ratio). Customer-base concentration is defined as factor to reduce selling cost including cost to attract customer and improve customer's performance. For this purpose, multivariate regression model is estimated for panel data. Intended data are collected from 104 companies accepted in Tehran stock exchange during 1386- 1393. The result of current study represents meaningfully negative relationship between customer-base concentration and financial performance with criterion of return on asset. Also it shows lack of meaningful relationship between customer-base concentration and economic performance with criterion of refined economic value added and operational performance (function) with criterion of inventory turnover ratio.

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