Abstract: Being a special type of transactions, related party transaction is a key factor that affects the management of enterprises. Few researches take the perspective of supply chain risk management to explore the inherent mechanism of how the transactions of related large customers impact the technological innovation of enterprises. Based on the analysis of A-share listed companies from 2016 to 2017, this study finds that the transaction of related large customers not only have a positive relationship with the input of technological innovation but also have an inverse-U shaped relationship with the output of technological innovation. Because the real earnings management plays a mediating role between the transactions of related large customers and the output of technological innovation, a larger input into technological innovation does not lead to a larger output from technological innovation when the related large customers are much bigger than other customers. Financing constraints restrain the impact of related large customer transactions on the output of technological innovation. Internal controls alleviate the impact of related large customer transactions on the input of technological innovation. There is a significant positive relationship between the transactions of related large customers and the technological innovation in stated-owned enterprises, older enterprises and less competitive enterprises.

Key words: related large customer, technological innovation, financing restriction, internal controls, real earnings management