Socially Responsible Corporate Customers

Socially Responsible Corporate Customers

Rui Dai, Hao Liang, Lilian Ng

Series number :

Serial Number: 
560/2018

Date posted :

May 02 2018

Last revised :

April 16 2018
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Keywords

  • Corporate Social Responsibility • 
  • Corporate Customers • 
  • Global Supply Chains • 
  • Economic Benefits

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.

Authors

Real name:
Rui Dai
Real name: 
Research Member
Singapore Management University, Lee Kong Chian School of Business
Real name:
Lilian Ng