Supply network centrality and ESG performance: A resource dependence perspective

Siying Quan, Peng Cheng and Jia Zhai

Finance Research Letters, 2025, vol. 79, issue C

Abstract: In this study, we examine the relationship between a firm's social capital measured by its centrality in the supply network and its environmental, social, and governance (ESG) performance. Using data from China's A-share firms, we apply resource dependence theory and show a negative correlation between in-degree centrality and ESG performance. Specifically, firms with greater social capital from suppliers tend to allocate fewer resources for enhancing ESG performance, especially when facing financial constraints or low investor protection, or if state-owned enterprises. This study enriches the ESG literature by integrating network-based variables and provides valuable insights into sustainable performance within supply networks.

Keywords: ESG performance; Social capital; Supply network; Chinese listed firms (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:79:y:2025:i:c:s1544612325005859

DOI: 10.1016/j.frl.2025.107322

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