Abstract: The implicit contract of supply chain and the change of customer concentration will affect the financing cost of enterprises. This paper explores the relationship between customer concentration and debt financing cost with a sample of A-share non-financial listed companies in Shanghai and Shenzhen from 2007 to 2017.The results show that: with the increase of customer concentration, the debt financing cost increases first and then decreases, that is to say, there is a non-linear relationship of inverted U-shaped between them,and this relationship only exists in the case of low level of regional rule of law and low degree of industry monopoly,while in the case of high degree of industry monopoly, there is a U-shaped relationship between them.After further distinguishing state-owned enterprises and private enterprises, the regression results show that this inverted U-shaped relationship only exists in state-owned enterprises, and there is a significant positive correlation between them. This study provides reasonable suggestions for enterprises in different situations to reduce the cost of debt financing through effective management of supply chain relationship.

Key words: supply chain implicit contract, customer concentration, debt financing cost, level of rule of law, industry monopoly