Publication

Growing, learning, and connecting: Deciphering the complex relationship between government customer concentration and firm performance

Citations
Altmetric:
Soloist
Composer
Publisher
Wiley
Date
3/31/2024
Additional date(s)
Abstract
Contents
Subject
Subject(s)
Research Projects
Organizational Units
Journal Issue
Genre
Description
The interplay between a firm's customer portfolio and the firm's performance presents a theoretical conundrum that challenges traditional supply chains. In particular, the role of government customer concentration-how extensively a firm incorporates government entities as part of its customer base-emerges as a pivotal factor with the potential to both bolster and burden firm performance. Analyzing 3,643 firm-year observations from the U.S. Federal Procurement Data System-Next Generation, Compustat, and FactSet Revere reveals an inverse U-shaped relationship between government customer concentration and firm performance. Excessive or insufficient government customer concentration adversely impacts performance, suggesting that a strategic balance is essential. Firm size, absorptive capacity, and network embeddedness are crucial in navigating this complex relationship, guiding a firm toward optimizing its government customer portfolio. This research advances the discourse on customer base management, underscoring the essential strategic considerations for firms interacting with government buyers.
Format
Department
Supply and Value Chain Management
Advisor