Predicting Firm Stock Returns with Customer Stock Returns: A Mediated Moderation Model of Customer Concentration and Investor Attention — Oak Academic Publishing
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Predicting Firm Stock Returns with Customer Stock Returns: A Mediated Moderation Model of Customer Concentration and Investor Attention
Beijing Dublin International College of Beijing University of Technology, Beijing, China
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China Petroleum & Natural Gas Pipeline Engineering Co., Ltd., Beijing, China
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Shanghai Business School, Shanghai, China
1 Beijing Dublin International College of Beijing University of Technology, Beijing, China
2 China Petroleum & Natural Gas Pipeline Engineering Co., Ltd., Beijing, China
As interactions between companies in the same industry chain become more interconnected, customers have become a key factor impacting company strategy and operations. Along the same lines, advanced customer information has become an increasingly reliable predictor of corporate stock returns. Specifically, we propose a mediated moderation model in which customer concentration moderates the predictive effect of customer stock returns, where this moderating effect is mediated by investor attention. Using panel data from Chinese A-share listed manufacturing firms between 2017 and 2023, we empirically test our model. The results show that customer stock returns significantly predict company stock returns. Furthermore, higher customer concentration strengthens this predictive relationship, but only when it attracts sufficient investor attention. These findings highlight the importance of customer-related market signals in investment decision-making and suggest that investor attention plays a crucial role in translating customer performance into firm valuation in capital markets.
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