Abstract: In the context of intensifying global competition, rapid technological change, and increasing supply-chain uncertainty, collaborative innovation has become a key strategy for firms to integrate external resources and build resilience. However, extant literature largely treats interorganizational relationships as stable and focuses on individual firm performance, thus overlooking the dynamic nature of market-side supply-chain ties—particularly customer relationships. This study addresses this gap by examining how changes in key customer relationships influence firms' collaborative innovation, along with the underlying mechanisms and boundary conditions. We develop a dynamic framework linking customer relationship changes, relationship-specific investment, market competition and collaborative innovation. We conceptualize customer relationship change as a form of demand-side supply-chain uncertainty that restructures cooperative networks rather than simply altering trading volume. Frequent turnover among major customers is argued to weaken trust, disrupt relationship learning, destabilize coordination routines and heighten perceived risks of knowledge spillover, thereby exerting a sustained negative impact on collaborative innovation. Relationship-specific investment—firms' specialized commitments to key customers in the form of customized assets, co-developed processes and relational governance—plays a core mediating role： unstable customer ties induce firms to scale back such investments, which in turn undermines cross-organizational knowledge sharing and co-creation. Market competition is introduced as a crucial contextual moderator that both stimulates firms' general incentives to collaborate and amplifies the risks associated with relationship turbulence and sunk specialized investments, giving rise to a moderated mediation mechanism. Empirically, this study is based on panel data for non-financial firms listed on the Shanghai and Shenzhen A-share markets over the period 2010—2023. Customer relationship changes are used to capture the instability of firms' major customer portfolios; collaborative innovation is employed to depict the depth and breadth of firms' joint innovation with external partners; and relationship-specific investment reflects the extent to which firms allocate resources in a highly customer-dependent manner. Methodologically, we estimate panel regression models incorporating firm-level control variables and fixed effects, and further conduct tests of mediation effects, moderation effects, and moderated mediation effects. In addition, a series of robustness checks and procedures to address endogeneity are implemented to mitigate potential endogeneity bias and enhance the reliability and robustness of the results. Our findings are threefold. First, customer relationship changes have a significant and robust negative effect on collaborative innovation, establishing relationship continuity as a fundamental driver of collaborative capacity. Second, relationship-specific investment is a key transmission mechanism. Customer turbulence reduces such investment, which is positively associated with collaborative innovation. Mediation analyses confirm a significant indirect negative effect, alongside a persistent direct effect, indicating partial mediation. Unstable customer structures discourage dedicated commitments, thereby eroding trust, raising coordination costs, and weakening collaborative innovation. Third, market competition shapes these effects. It significantly amplifies the detrimental direct impact of customer relationship changes and strengthens their negative association with relationship-specific investment, resulting in a stronger indirect effect in more competitive environments. The heterogeneity of this moderating role is concentrated in the direct path： the competition-enhancing effect on the negative impact of customer relationship changes is particularly pronounced in non-high-tech industries and low-growth firms, whereas high-tech and high-growth firms appear better able to offset or absorb relationship shocks. Additional heterogeneity analyses show that the negative main effect of customer relationship changes on collaborative innovation is present across subsamples but is stronger for firms located in eastern and central regions, larger firms and firms facing tighter financing constraints, reflecting their greater exposure to competitive,and resource pressures. Overall, this study contributes by： ① introducing demand-side relationship dynamism into collaborative innovation analysis, shifting focus from static structures to relationship evolution; ② identifying relationship-specific investment as a central micro-level transmission channel, articulating a “relationship turbulence-investment contraction-innovation disruption” pathway; ③ incorporating market competition and firm heterogeneity to clarify when and for which firms customer relationship shocks more severely undermine collaborative innovation. These insights enrich theoretical dialogue between supply-chain and innovation research and inform the design of resilient customer portfolios and relational investment strategies under uncertainty and competition.