Socially Responsible Corporate Customers

74 Pages Posted: 27 Jan 2018 Last revised: 14 Mar 2020

See all articles by Rui Dai

Rui Dai

Wharton Research Data Services (WRDS)

Hao Liang

Singapore Management University - Lee Kong Chian School of Business; European Corporate Governance Institute (ECGI)

Lilian Ng

Schulich School of Business, York University; European Corporate Governance Institute (ECGI)

Date Written: July 1, 2019

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 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

JEL Classification: G23, G30, G34, M14

Suggested Citation

Dai, Rui and Liang, Hao and Ng, Lilian, Socially Responsible Corporate Customers (July 1, 2019). European Corporate Governance Institute (ECGI) - Finance Working Paper No. 560/2018, Journal of Financial Economics (JFE), Forthcoming, Available at SSRN: https://ssrn.com/abstract=3111073 or http://dx.doi.org/10.2139/ssrn.3111073

Rui Dai

Wharton Research Data Services (WRDS) ( email )

3819 Chestnut St
Suite 300
Philadelphia, PA PA 19104
United States

Hao Liang (Contact Author)

Singapore Management University - Lee Kong Chian School of Business ( email )

469 Bukit Timah Road
Singapore 912409
Singapore

HOME PAGE: http://business.smu.edu.sg/faculty/profile/130396/LIANG-Hao

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Lilian Ng

Schulich School of Business, York University ( email )

N223, Seymour Schulich Building
4700 Keele Street
Toronto, Ontario ON M3J 1P3
Canada
+1.416.736.2100 x77994 (Phone)

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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