TITLE:
Predicting Firm Stock Returns with Customer Stock Returns: A Mediated Moderation Model of Customer Concentration and Investor Attention
AUTHORS:
Wenxuan Lu, Yushan Han, Rongjia Zhang
KEYWORDS:
Customer Stock Returns, Stock Return Prediction, Investor Attention, Customer Concentration
JOURNAL NAME:
Modern Economy,
Vol.16 No.11,
November
21,
2025
ABSTRACT: 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.