Research on the Path of Supply Chain Concentration Influencing Non ‐ Efficiency Investment of Enterprises

: This paper selects relevant panel data of A-share listed enterprises from 2009 to 2021 to empirically test the impact of supply chain concentration on enterprises' inefficient investment, and deeply analyzes the specific impact mechanism. The research shows that the concentration of supply chain aggravates the overinvestment and underinvestment of enterprises, resulting in inefficient investment of enterprises. This conclusion is still valid after endogenous test and robustness test. Mechanism analysis shows that in the case of excessive investment, supply chain concentration exacerbates corporate financialization, reduces asset specificity, and leads to inefficient investment by enterprises; In the case of insufficient investment, supply chain concentration weakens corporate governance and reduces inventory turnover, leading to inefficient investment for enterprises. This inspires enterprises to increase their corporate governance capabilities, improve supply chain efficiency, promote rational asset allocation, and improve investment efficiency


Introduction
The report of the 20th National Congress of the Communist Party of China pointed out that the theme should be to promote high-quality development and focus on improving the resilience of the industrial chain supply chain.Under the influence of the ever-changing international situation, overcapacity, and relatively insufficient domestic demand, some industries in China are facing risks such as key core enterprise technology bottlenecks and industrial chain disruptions.Therefore, maintaining the security and stability of the industrial chain supply chain is a strategic requirement for building a new development pattern at this stage.Many scholars have conducted research on supply chain relationships, and Porter proposed in 1980 that the bargaining power of suppliers and customers can affect the competitive environment of enterprises.Similarly, in the context of increasingly close supply and demand relationships and deepening interdependence, conflicts of interest between suppliers, enterprises, and customers can affect the investment efficiency of enterprises.When the concentration of the supply chain is high, enterprises will have a strong dependence on large customers, leading to a weak position in negotiations.In addition, in order to stabilize participation and pay more transaction costs, enterprises are forced to lower prices, compress their profit margins, and bring operational and financial risks to the enterprise, thereby weakening its corporate governance capabilities.From the perspective of the entire industry, inefficient enterprises will continue to survive (zombie enterprises), while efficient enterprises will be forced to exit (shadow enterprises).From an internal perspective, inefficient investment in enterprises can lead to the flow of funds to departments with low marginal productivity, while neglecting departments with high marginal productivity but small scale that require support, leading to inefficient production and operation throughout the entire process.
It is worth noting that although many scholars have conducted research on supply chain concentration and inefficient investment by enterprises, there is not much research on the specific impact mechanism in the academic community.Even if scholars conduct research, the research subjects are relatively shallow.Therefore, studying the impact of supply chain concentration on inefficient investment at the micro enterprise level has important theoretical value and practical significance for guiding enterprises to integrate supply chain resources, improve resource allocation efficiency, and alleviate inefficient investment.This article empirically analyzes the impact of supply chain concentration on non efficiency investment of enterprises.Compared with existing research, the main possible contributions of this article are: (1) considering non efficiency investment of enterprises from two aspects: overinvestment and underinvestment, enriching relevant research on non efficiency investment of enterprises; (2) Conduct in-depth research on the mechanism of the impact of supply chain concentration on inefficient investment by enterprises, and analyze the mechanisms from the perspectives of excessive and insufficient investment by enterprises.

Centralized Supply Chain
Against the backdrop of increasingly close supply and demand relationships and deepening interdependence, enterprises and the supply chain share weal and woe and move the whole body together (Sexton et al., 2018).At present, Chinese enterprises are in the critical period of intensive and Digital transformation and upgrading.If the internal resources of enterprises are difficult to coordinate, there will be inefficient investment (Zhai et al., 2022).The concentration of supply chain reflects the degree of dependence of enterprises on the supply chain.The higher the degree of dependence of enterprises on the supply chain, the higher the operational risk they face (Duan et al., 2020).Firstly, if there is no stable supply relationship between the enterprise and its major customers or suppliers, the breach or termination of the cooperation relationship between the major customers or suppliers will have a significant negative impact on the enterprise's operations (Chen et al., 2023), and even lead to bankruptcy.Secondly, excessive reliance on large customers and suppliers by enterprises can put them in a disadvantaged position in negotiations.Strong large customers and suppliers force enterprises to compress reasonable profits for their own interests, providing more room for profit (Xue et al., 2019), and affecting the normal operation of the enterprise.In addition, the higher the degree of dependence of enterprises on the supply chain, the higher the financial risk they face (Bao et al., 2022).Firstly, relying on large customers and suppliers can pose greater financing constraints for enterprises.In order to obtain investment, enterprises need to pay more transaction costs and face more financing constraints.Secondly, in order to maintain supply chain relationships, enterprises often provide more commercial credit, and more accounts receivable in finance make it difficult for the company's cash flow to flow normally.Once the "risk effect" caused by supplier concentration affects a company's investment decisions, it will lead to inefficient investment by the company.Proposing hypothesis H1: H1: Concentration of the supply chain will reduce the investment efficiency of enterprises, exacerbate underinvestment and overinvestment.

Supply Chain Concentration and Inefficient Enterprise Investment
The main objects of investment for enterprises are main business investments and stock and bond investments (Di, Z., 2019), while the level of investment for enterprises is determined by the company's governance capabilities.The main objects of investment for enterprises are main business investments and stock and bond investments (Wang et al., 2019), while the level of investment for enterprises is determined by the company's governance capabilities (Liu, A.,2019).Therefore, from the perspective of investment entities, the higher the corporate governance ability, the more rational the enterprise will be in the investment decisionmaking process, the more likely it is to improve the investment efficiency of the enterprise, and reduce the occurrence of non efficiency situations.However, the reliance on large customers brought about by the concentration of the supply chain can to some extent interfere with the investment decisions of enterprises, resulting in inefficient investment.
From the perspective of investment object, fixed assets investment used for enterprise production and operation generally does not fluctuate significantly without external interference (Hui et al., 2023).However, when large customers intervene, enterprises tend to purchase production factors and production equipment related to large transactions in large quantities in order to maintain the cooperative relationship with customers, resulting in excessive investment in one business and insufficient investment in other investment projects (Wen et al., 2022).In addition, large customers generally account for a large share of the company's sales.When large customers do not pick up goods, it is easy to cause inventory backlog, and if they have already picked up goods, it may lead to insufficient inventory, which greatly affects the company's inventory turnover efficiency and leads to low supply chain efficiency (Liu et al., 2023).
Excessive financial investment by enterprises is also an important reason for their inefficiency in investment.Currently, due to the reduction of dividends in the physical industry, the short investment time and high returns of the financial industry have attracted a large number of investment preferences from enterprises.However, if a company's investment "shifts from real to virtual", it will inevitably lead to the main business investment being squeezed out, affecting the sustainable development of the company.Existing research has shown that supply chain concentration can exacerbate the financialization of enterprises, which may further lead to inefficient investment by enterprises.
Therefore, this article proposes the following assumptions: H2: Supply chain concentration leads to inefficient investment by distorting corporate governance, exacerbating corporate financialization, affecting specialized assets of enterprises, and reducing supply chain efficiency through four paths.

Model Design and Variable Definition
According to hypothesis H1, in order to study the relationship between supply chain and inefficient investment of enterprises, this article constructs the following model: ( In equation ( 1), i represents the enterprise and t represents the time.
is the residual value calculated by regression method.
is the concentration ratio of the supply chain.are control variables.Year and Ind are fixed effects of year and industry.
is random perturbation term.According to H1, this article focuses on examining .If the coefficient is significantly positive, it indicates that supply chain concentration will exacerbate non efficiency investment of enterprises.
According to hypothesis H2, in order to explore the specific mechanism of supply chain concentration affecting non efficiency investment of enterprises, the specific model is as follows: (2) (3) Equation ( 2) is used to analyze the relationship between explanatory variables and mediating variables, while Equation ( 3) is a further analysis after adding mediating variables on the basis of ( 1) and (2).In models ( 2) and (3), are the mediating variables of this article, including four indicators: corporate financialization, asset specificity, supply chain efficiency, and corporate governance capability.All other variables are consistent with the previous text.

Data Description
Explanatory variable: Inefficient investment of enterprises.This article uses the following model to regress the sample data, using the newly added investment amount that lags behind a certain period and some financial indicators of the company to predict the newly added investment amount of the current period.Then, the residual is calculated by subtracting the estimated value from the actual value, and the non-efficient investment of the company is measured by the residual.Other positive residuals represent overinvestment, while negative residuals represent underinvestment., represents the total return on assets of company i in year t-1.
Core explanatory variable: This paper uses the proportion of the sum of the top five customers' sales to the total sales as an indicator to measure the concentration ratio of the supply chain (CC).
Intermediary variables: This article takes enterprise financialization, asset specificity, supply chain efficiency, and corporate governance capabilities as intermediary variables.This article uses the proportion of financial assets to total assets to measure the level of financialization (Fin) of enterprises.In addition, the principal analysis comprehensive indicators for measuring corporate governance (Sup) include the shareholding ratio of the first largest shareholder, the shareholding ratio of the second to fifth largest shareholders, the shareholding ratio of institutional investors, whether the chairman and directors hold the same position, the size of the board of directors, the proportion of independent directors, the number of board meetings, the number of supervisory board meetings, and the number of shareholders' meetings.This article uses the ratio of the sum of fixed asset net value, construction in progress, intangible assets, and long-term deferred expenses to the total assets of the enterprise as an alternative variable for asset specificity (ASI).Finally, this paper uses the natural logarithm (IVT) of inventory to measure the supply chain efficiency of enterprises.
Control variables: This article selects the total return on assets ROA, enterprise AGE, long-term debt ratio LD, operating cash flow Cfo , fixed asset ratio Tangible , and board size Board, SOE (SOE=1 for state-owned enterprises, SOE=0 for other enterprises) is used as the control variables of the model.The descriptive analysis results are as follows.

Benchmark Regression
According to hypothesis H1 and model (1), analyze the impact of supply chain concentration on overinvestment and underinvestment of enterprises, respectively.The regression results are shown in Table 2, which control for the double fixed effects of year and industry, with control variables introduced in columns ( 2) and (4).From columns (1) and ( 2) of Table 2, it can be seen that under fixed years and industries, regardless of whether control variables are included, the regression coefficients of supply chain concentration on enterprise overinvestment are all positive, and significant at the 1% significance level, indicating that supply chain concentration significantly exacerbates enterprise overinvestment.Similarly, from columns (3) and (4) of Table 2, it can be seen that the regression coefficient of supply chain concentration on corporate underinvestment is positive.After adding control variables, the regression results are still significant at the 5% significance level, indicating that supply chain concentration significantly exacerbates corporate underinvestment.In summary, customer concentration can lead to both overinvestment and underinvestment in enterprises.From two perspectives of investment inefficiency, it is confirmed that supply chain concentration indeed reduces the investment efficiency of enterprises.

Endogeneity Testing
From the above regression results, it can be seen that supply chain concentration can lead to excessive and insufficient investment by enterprises, resulting in inefficiency in the investment process.Considering the possible reverse causal relationship between supply chain concentration and enterprise investment, this article uses the instrumental variable method for endogeneity testing (Bartik, 1991).In order to mitigate the error caused by the correlation between the lagging variable and the Error term, this paper builds a "Bartik instrument: ECC" (the product of the first order concentration ratio LCC (i, t-1) of the lagging supply chain and the first order differential DCC (i, t-1) of the concentration ratio of the supply chain in time) based on the practice of Bartik (1991) in order to better avoid the endogenous problem in measurement identification, and then estimates it using the 2SLS method.The regression results are shown in Table 3.In the regression results of the first stage in Table 3, the regression coefficient of Bartik tool variable to supply chain concentration ratio CC is significantly positive, and significant at the level of 1%, which shows that the tool variable is effective.In addition, in the two-stage regression, the Kleibergen Paap rk LM and Kleibergen Paap rk Wald F statistical values were significantly greater than their respective critical values, indicating that they passed the non identification test and weak instrumental variable test.From the Bartik instrumental variable regression results, it can be seen that after considering endogeneity issues, supply chain concentration still exacerbates the underinvestment and overinvestment of enterprises, indicating that the benchmark test results are basically stable and reliable.

Robustness Test
This article changes the sales proportion (CC) of the top five customers to the sales proportion (BCC) of the top five customers, which can better highlight the degree of dependence of enterprises on big customers.The regression results are shown in Table 4. From the regression results in columns ( 1) and ( 2), it can be seen that the sales proportion of the largest customer has positive regression coefficients for both overinvestment and underinvestment in the enterprise, and both are significant at the 5% level.This indicates that after replacing the core explanatory variable, supply chain concentration still increases the non efficiency investment of the enterprise, confirming the previous conclusion.
To confirm the above research, this article added three control variables: Turnover, Outdir, and KZ financing constraint.The regression results are shown in Table 4. From the regression results in columns ( 3) and ( 4), it can be seen that the regression coefficients for supply chain concentration (CC) and overinvestment and underinvestment in enterprises are both positive and significant at the 1% significance level, indicating the conclusion that supply chain concentration exacerbates inefficient investment in enterprises.
Due to insufficient disclosure of supply chain information before 2012 and the impact of the 2020 epidemic, there may be deviations in the regression results.This article excluded data from the five years of 2009, 2010, 2011, 12, and 2020 and conducted a new regression.The regression results are shown in Table 4.According to the regression results in columns ( 5) and ( 6), the regression coefficients for supply chain concentration (CC) and overinvestment and underinvestment in enterprises are both positive.The former holds true at a significance level of 1%, while the latter holds true at a significance level of 10%.This indicates that the regression results are still significant after re selecting non continuous samples.Further demonstrate the reliability of the above results.The concentration of supply chain may lead to four paths: distorting corporate governance, intensifying corporate financialization, affecting specialized assets of enterprises, and reducing supply chain efficiency, leading to inefficient investment by enterprises.As for whether it will lead to overinvestment or underinvestment, empirical explanations will be provided below.
Table 5 shows the mechanism analysis of corporate financial investment and corporate asset specificity as mediating variables.As these two mediating variables are only significant in the case of overinvestment during the empirical analysis process, considering that the table is too lengthy and lacks practical research value, they will not be elaborated here.According to the three-step effect of the mesomeric effect, the first step, from column (1), we can see that supply chain concentration will aggravate enterprises over investment; In the second step, the results in columns (2) and (4) show that supply chain concentration significantly promotes the financialization of enterprises and significantly reduces their dedicated assets.Step 3: From column (3), it can be seen that the regression coefficient of corporate financial investment is positive, indicating that corporate financial investment can lead to overinvestment.Moreover, the regression coefficient of supply chain concentration on corporate overinvestment has decreased compared to column (1), indicating that corporate financial investment partially mediates the impact of supply chain concentration on corporate overinvestment.From column (5), it can be seen that the regression coefficient of enterprise specific assets is positive, indicating that enterprise specific assets will lead to excessive investment.However, the regression coefficient of supply chain concentration on enterprise overinvestment has increased compared to column (1), indicating that the specificity of enterprise assets partially obscures the impact of supply chain concentration on enterprise overinvestment.
Table 6 shows the mechanism analysis of corporate governance capability and inventory turnover rate as mediating variables.As these two mediating variables are only significant in the case of insufficient investment during the empirical analysis process, considering that the table is too lengthy and lacks practical research value, they will not be elaborated here.The first step, as shown in column (1), is that the concentration of the supply chain will exacerbate the insufficient investment In the second step, the results in columns ( 2) and ( 4) show that the concentration of the supply chain significantly weakens the management ability of the enterprise and significantly reduces the efficiency of the enterprise's supply chain.Step 3, as shown in column (3), the regression coefficient of corporate governance capability is positive, indicating that excessive corporate governance control can lead to insufficient investment in the enterprise.Moreover, the regression coefficient of supply chain concentration on underinvestment of enterprises has decreased compared to column (1), indicating that corporate governance capabilities partially mask the impact of supply chain concentration on underinvestment of enterprises.From column (5), it can be seen that the regression coefficient of inventory turnover rate is positive, indicating that inventory turnover rate will lead to insufficient investment for enterprises.Moreover, the regression coefficient of supply chain concentration on enterprise overinvestment has increased compared to column (1), indicating that inventory turnover efficiency partially obscures the impact of supply chain concentration on enterprise overinvestment.

Conclusion and Suggestions
In recent years, with the increasingly close relationship between supply and demand, the problem of insufficient information has become widespread, and many enterprises are facing the problem of inefficient investment.On the basis of in-depth theoretical analysis of the impact of supply chain concentration on enterprises' inefficient investment and its mechanism, this paper selects relevant panel data of A-share listed enterprises from 2009 to 2021 to empirically test the impact of supply chain concentration on enterprises' inefficient investment, and in-depth analysis of the specific impact mechanism.The research shows that: (1) The concentration of supply chain aggravates the over investment and under investment of enterprises, resulting in inefficient investment of enterprises.This conclusion is still valid after the endogenous test and robustness test.(2) Mechanism analysis shows that in the case of overinvestment, corporate financialization partially mediates the process of supply chain concentration exacerbating corporate overinvestment, while corporate asset specificity partially obscures this process.This indicates that supply chain concentration exacerbates the financialization of enterprises, reduces their asset specificity, and ultimately leads to inefficient investment; (3) For the situation of insufficient investment, both corporate governance structure and supply chain efficiency partially obscure the process of supply chain concentration exacerbating excessive investment by enterprises.This indicates that supply chain concentration weakens corporate governance and reduces inventory turnover, leading to inefficient investment by enterprises.
Based on the above research results, this article proposes the following policy recommendations: (1) In order to alleviate the exacerbation of excessive investment by enterprises due to supply chain concentration, enterprises need to adhere to the principle of prudence in the investment process, and leverage the resource integration effect brought about by supply chain concentration.However, it does not rely heavily on the supply chain to make enterprises in a vulnerable position and alleviate the operational and cash flow risks brought about by supply chain concentration, to prevent inefficient investment behavior.(2) For enterprises with excessive investment, they should make appropriate financial investments to prevent the main business from becoming unreal due to excessive financial investment.In addition, it is necessary to fully leverage the substitute role of asset specificity in the financing process, promote equity capital financing, and improve enterprise investment efficiency.(3) For enterprises with insufficient investment, it is important to pay attention to the positive impact of corporate governance capabilities on investment efficiency, and optimize the design structure of enterprise investment decisions.In addition, enterprises should pay attention to the integration of supply chain information resources, alleviate the investment shortage caused by supply chain concentration, improve the efficiency of enterprise investment, and promote the first mover advantage of enterprises at the supply level.
Based on the direction and nature of the enterprise's investment assets, this article uses the sum of the new additions of intangible assets, fixed assets, and long-term equity investments.
, represents the actual new expenditures of company i in year t.

Table 1 .
Descriptive statistical results

Table 2 .
Baseline Regression Results

Table 3 .
Endogeneity test results

Table 5 .
Analysis of Overinvestment Path Mechanism

Table 6 .
Analysis of Underinvestment Path Mechanism