Abstract: This study focuses on enterprises and their customers who are all listed companies in the Chinese stock market from 2012 to 2022, to empirically test the impact of customers' industry competitive position on the enterprises’ innovation investment. The research finds that customers with a higher industry competitive position the enterprises' innovation investment. The mechanism test shows that customers with a higher industry competitive position enhance the enterprises' innovation investment level by reducing the enterprises' financing constraints decreasing the occupation of the enterprises’ commercial credit. Furthermore, when the customer concentration and customer stability of the enterprises are low and the geographical distance between them is close the positive relationship between customers with a higher industry competitive position and the enterprises' innovation investment is more significant.