Corporate social responsibility in the global value chain: A bargaining perspective

Christian Geisler Asmussen (), Andrea Fosfuri, Marcus Møller Larsen and Grazia D. Santangelo
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Christian Geisler Asmussen: Copenhagen Business School
Andrea Fosfuri: Bocconi University
Marcus Møller Larsen: Copenhagen Business School
Grazia D. Santangelo: Copenhagen Business School

Journal of International Business Studies, 2023, vol. 54, issue 7, No 1, 1175-1192

Abstract: Abstract Breaches of corporate social responsibility (CSR) in global value chains (GVCs) pose a managerial challenge for multinational enterprises (MNEs) and threaten both their reputations and global sustainability. While an MNE-centric perspective on these issues has dominated existing international business research, we show that a dynamic view of bargaining among actors in the GVC can yield novel insights. We draw on coalitional game theory and develop a model where an MNE collaborates, monitors, and negotiates prices with a supplier whose CSR breaches may be revealed by the MNE, external agents, or remain hidden. Our model illustrates how MNEs may face a hold-up problem when irresponsible actions by suppliers are made public, and the suppliers have the power to engage in opportunistic renegotiation. Interestingly, we show that greater monitoring by MNEs, if not combined with specific strategies, can have negative consequences by weakening the MNE’s bargaining position and, in some cases, even prompting more irresponsible actions by the suppliers. Our model advances international business research on GVC sustainability and has important implications for managers and researchers alike.

Keywords: GVCs; irresponsible behavior; game theory; MNE–supplier relationships (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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DOI: 10.1057/s41267-023-00635-w

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