The Role of Corporate Social Responsibility (CSR) Information in Supply-Chain Contracting: Evidence from the Expansion of CSR Rating Coverage

By Alper Darendeli, P. Fiechter, Joerg-Markus Hitz. Social Science Research Network, 2021

131 citations recorded by the source corpus.

We examine the effect of CSR information on stakeholder decision-making, specifically on supply-chain contracting decisions. We exploit a CSR information shock, the CSR rating coverage expansion by Thomson Reuters Asset4 in 2017, which provided CSR information and ratings for the first time for firms from the Russell 2000 index (hereafter, “treated firms”). Using a difference-in-differences design with the previously covered Russell 1000 supplier firms as control group, we find a negative effect of the CSR information shock for treated suppliers with low CSR ratings, who on average experience reductions in the number of contracts and the number of corporate customers. In cross-sectional analyses, we document variation in our treatment effect consistent with two underlying mechanisms: (i) benchmarking of suppliers’ CSR by corporate customers, and (ii) CSR-related public pressure on customer-supplier contracting. Collectively, our findings provide novel evidence on the causal effect of CSR information on stakeholders’ decision-making.

Subfields: Marketing, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/ddafc9c179b49f8ffef85117022a0c8036fb02a2

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Citations in the corpus

Mandatory CSR and sustainability reporting: economic analysis and literature review (2019, methodology): “CSR reporting could also serve as a disciplining tool for the supply chain (e.g., Spence and Rinaldi 2014; Dai et al. 2020; Darendeli et al. 2021).37 Moreover, Gao et al. (2014) find that managers from CSR-conscious firms engage less in self-serving insider trading and, if they do engage, reap…”