Abstract: Base supply-chain competition practice, the paper theoretically analyzed and empirically examined the influence of supplier relationship on corporate cash holdings’ competition effect. It was found that corporate cash holdings’ competition effect decreased with the increase of the supplier relationship strength, which was more significant in corporations in region of low legalization process and non-state-owned corporations. Above findings showed that supplier relationship could substitute for corporate’s limited financial resources and help enhance corporation’s product market competitive advantage. However, the substitution was restricted by institutional system factors of regional legal environment and state-owned character.