Customer Relationship Transaction, External Supervision, and Earnings Persistence Empirical Evidence based on China's Transitional Economy
Changlian Wang, Zhonggao Lin, Lingyun Ge

Abstract
This paper, based on the 2010 to 2015 A-share listed companies of China as the study sample, studies the following two issues: The first is : How does customer relationship transaction affect earnings persistence? The second is: How does an external oversight mechanism, such as institutional investor holdings and big four audits, regulate the impact of customer relationship transaction on earnings persistence? The study found that the greater the size of customer relationship transaction, the higher the persistence of earnings. Moreover, the external oversight mechanism of the big four audits and institutional investor holdings have further strengthened the significant relationship between customer relationship transaction and earnings persistence. The results show that maintaining a stable relationship between customer transactions can greatly enhance the company's earnings persistence. And also in the process, we show the value-added functions of the external oversight mechanism and the corporate governance effect of institutional investor holdings.

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