Abstract: The listed companies of China generally rely on relational transactions, and the customer concentration ratio is rather high. How this phenomenon will affect the litigation risks of the companies is worthy of attention. Taking the A-share companies listed in Shanghai and Shenzhen stock exchanges during the period of 2008-2017 as the research objects, this paper studies the impact of customer concentration ratio on corporate litigation risks and the heterogeneity of this impact in different contexts. The empirical results show that in the sample groups with higher customer concentration ratio, the customer concentration ratio will increase the litigation risks for the companies; while in the sample groups with lower customer concentration ration, the customer concentration ratio has no significant impact on the litigation risks for the companies. This also verifies that excessive customer reliance may increase corporate risks from the perspective of litigation risks. It is found through further distinguishing the company sizes, the nature of property rights, the quality of internal control, and the level of regional marketization that the impact of customer concentration ratio on litigation risks is only significant in the companies with small scale, non-state holding, weak internal control and lower regional marketization. It indicates that the difference in market standing and internal and external governance mechanisms would cause the heterogeneity in the customers' influence on corporate behaviors. Companies can reduce these kinds of impacts and litigation risks through the improvement of internal and external governance mechanisms.

Key words: customer concentration ratio, litigation risks, internal control, marketization degree