Abstract Taking non-financial listed companies in China's A-share market from 2007 to 2022 as the research subject, the paper explores the impact of the special supply chain relationship where major customers are also suppliers on the level of corporate cash holdings. The research findings indicate that having major customers who are also suppliers significantly increases a company's level of cash holdings. Mechanism examinations reveal that these key customers and suppliers enhance corporate cash holdings by reinforcing the transactional, precautionary and agency motives for holding cash. Heterogeneity analysis shows that the promotional effect of key customers and suppliers on corporate cash holdings is more pronounced when there is weaker geographical proximity in the supply chain, lower stability in supply chain relationships, poorer corporate governance and less media attention. The conclusion not only enriches the research in the field of major customers who are also suppliers and corporate cash holdings, but also helps to maximize the positive impact of supply chain relationships on corporate financial decisions.
2025, Vol. 42 
