Dr Hao Liang, Singapore Management University, " Socially Responsible Corporate Customers"
Using corporate social responsibility (CSR) ratings of 34,117 corporate customer-supplier relationships from 50 countries worldwide, we find that customers’ CSR ratings are associated with suppliers’ subsequent CSR performance, but not vice versa and that their locations matter. Results from quasi-natural experiments and M&A acquisitions suggest that customer activism for promoting CSR in suppliers is causal. The bargaining power of firms and their network connectedness are channels through which customers affect suppliers’ CSR practices. Finally, increasing collaborative CSR efforts between customers and suppliers helps improve their operational efficiency and firm valuation but increase only the customers’ future sales growth.
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Last updated on Tuesday 16 August 2016