Previous studies have documented that information asymmetry and agency problem are the most important factors that can lead to stock price crash risk. While the supervision of stakeholders such as analysts, institutional investors and creditors can effectively reduce a firm’s stock price crash risk. Specially, as one of the firms’ important stakeholders, the customers can exert the corporate governance effect and help to reduce their supplier firms’ stock price crash risk. However, none of the existing studies has focus on the impact of certain specific characteristics of a customer on its supplier firm’s stock price crash risk. Based on customer-supplier relationship chain, this paper examines whether stock price crash risk of a customer can spread to its supplier firm owing to close economic correlation from an external perspective. Because of the existence of the relationship as an interest community between suppliers and customers, a customer and its supplier rarely stand or fall alone; when a customer has the stock price crash risk, the crash risk may spread to its supplier, which we call the contagion effect along the supply chain. Specially, when the supplier’s own corporate governance is poor or information asymmetry is serious, a customer’s stock price crash risk can easily become the last straw that will lead to a death of a camel, that is to say, when the supplier’s healthy is poor, the contagion effect will be more significant. What’s more, we further analyze how the close degree of a customer and its supplier can influence the contagion effect. We expect that closer relation will lead to stronger contagion effect. Due to closer relation, a customer or its supplier will be more difficult to change their trading object because of highly switching cost. Using a special database that both a customer and its supplier along the supply chain are listed companies, we explore the contagion effect through the supply chain based on customer stock price crash risk. It comes to the following conclusions: firstly, there is no synchronicity between a customer’s crash risk and its supplier’ concurrent stock price crash risk, but stock price crash risk of a customer is positively related with the stock price crash risk of its supplier in the following year, which means that there exists contagion effect along the supply chain. What’s more, this contagion effect only exists when the supplier’s own stock price crash risk is higher. Secondly, when a customer highly relies on its supplier or a supplier highly relies on its customer, or one firm has much proprietary investment, or the relationship between them are more stable or benign, the contagion effect is stronger. Its contributions may lie in the following three aspects: firstly, many studies investigate the contagion effect between two firms that are in the same industry or are link up by a third party, and few of them are based on contagion through a supply chain, so our study may provide a new setting on the literature of contagion effect. Secondly, the mainstream literature considers that internal factors like hiding bad information and poor corporate governance are the main factors leading to stock price crash risk. This paper shows that a customer’s stock price crash risk as an external factor can also lead to its supplier firm’s stock price crash risk, thereby helping to enrich the literature of stock price crash risk. Thirdly, most of the existing literature focuses on how customer concentration affects the supply firm’s performance; based on a special supply chain, we examine the contagion effect of customer stock price crash risk on its supplier, providing new insight into economic consequences of customer-supplier relationship and helping to enrich the literature of customer-supplier relationship.