Small worlds within global supply chains: implications for multinational enterprises’ environmental, social, and governance controversies

Sangho Chae (), Igor Filatotchev (), Seongtae Kim () and Byung-Gak Son ()
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Sangho Chae: University of Warwick
Igor Filatotchev: King’s College London
Seongtae Kim: Aalto University
Byung-Gak Son: University of London

Journal of International Business Studies, 2025, vol. 56, issue 6, No 8, 807-818

Abstract: Abstract With increasing public attention to corporate sustainability, environmental, social, and governance (ESG) controversies emerging in global supply chains present a growing problem for multinational enterprises (MNEs). This paper investigates whether MNEs with geographically dispersed suppliers are more likely to be exposed to supplier-related ESG controversies. It also explores structural characteristics of global supply chains that can mitigate MNEs’ exposure to such controversies. Building on the literature on supply chain complexity and small-world networks, we suggest that the small-worldness of an MNE’s supply chain network can mitigate the impact of the geographical dispersion of suppliers on supplier-induced ESG controversies. Our analysis of the Fortune 500 largest U.S. companies from 2010 to 2019 reveals that MNEs with geographically dispersed suppliers suffer from more supplier-induced ESG controversies, while small-worldness attenuates such impact. Our findings contribute to the international business literature by highlighting small-worldness as a network structural characteristic that can be deployed by MNEs to mitigate the negative impacts of supply chain spatial complexity.

Keywords: ESG controversies; Supplier geographical dispersion; Small-world networks; Global supply chain; Network analysis (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1057/s41267-025-00796-w

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