Abstract: Based on the relational contract theory and choosing China’s A-share listed companies from 2009 to 2021 as the research sample, this paper uses Python to treat data related to customer stability and corporate misconduct and empirically examines the impact of customer stability on corporate misconduct through the bidirectional fixed effects model and instrumental variable regression. The findings show that stable customer relationships significantly suppress corporate misconduct, meaning that companies with a stable customer base are less likely to get out of line. Mechanism analysis reveals that stable customer relationships inhibit corporate misconduct by increasing analyst attention, improving corporate governance, and enhancing supply chain transparency. Heterogeneity analysis indicates that the inhibitory effect of customer stability on corporate misconduct is more pronounced in companies with lower regional legal standards and higher ownership concentration. The economic consequences test shows that corporate misconduct reduces business performance, while stable customer relationships not only serve as a supervisory role in curbing misconduct but also help improve business performance. The conclusions of this study enrich the research on micro-level corporate-customer relationships and provide insights into corporate governance from the perspective of company-customer relations. Furthermore, this paper offers a reference for promoting high-quality development of enterprises from the perspective of customer relationships within the context of China’s dual circulation economic strategy.

Key words: customer stability, corporate misconduct, corporate governance, relational contract theory