Socially responsible corporate customers

Rui Dai, Hao Liang and Lilian Ng

Journal of Financial Economics, 2021, vol. 142, issue 2, 598-626

Abstract: Corporate customers are an important stakeholder in global supply chains. We employ several unique international databases to test whether socially responsible corporate customers can infuse similar socially responsible business behavior in suppliers. Our findings suggest a unilateral effect on corporate social responsibility (CSR) only from customers to suppliers, an evidence further supported by exogenous variation in customers’ close-call CSR proposals and by product scandals. Customers exert influence on suppliers’ CSR through positive assortative matching and their decision-making process. Enhanced collaborative CSR efforts help improve operational efficiency and firm valuation of both customers and suppliers but increase only the customers’ future sales growth.

Keywords: Corporate social responsibility; Corporate customers; Global supply chains; Economic benefits (search for similar items in EconPapers)
JEL-codes: G23 G30 G34 M14 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:142:y:2021:i:2:p:598-626

DOI: 10.1016/j.jfineco.2020.01.003

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