Socially responsible corporate customers *

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 effort s help improve operational efficiency and firm valuation of both customers and suppliers but increase only the customers' future sales growth. (c) 2020 Elsevier B.V. All rights reserved.

Automated summary

Corporate customers have a unilateral effect on suppliers' CSR and influence them through positive assortative matching and decision-making processes. Enhanced collaborative CSR efforts improve operational efficiency and firm valuation for both customers and suppliers, but only increase customers' future sales growth.