IDEAS home Printed from https://ideas.repec.org/a/bla/jscmgt/v55y2019i1p71-87.html

The Impact of Supplier Sustainability Risk on Shareholder Value

Author

Listed:
  • Seongtae Kim
  • Stephan M. Wagner
  • Claudia Colicchia

Abstract

Business scandals like sweatshop labor have received growing attention in the field of supply management. Yet little is known about how detrimental such scandals are to buying firms. This study aims to fill this gap by examining the magnitude of the consequences of what are termed as supplier sustainability risks (SSRs). To this end, we conduct an event study analysis followed by regression modeling based on a sample of 196 U.S. publicly traded firms’ SSRs. The results reveal that SSRs are associated with a 1.00 percent reduction in shareholder wealth. The market reacts negatively but not differently to the two types of SSR: process‐related risks and product‐related risks. Finally, a firm's moral capital does play a mitigating role for SSRs and process‐related risks; however, it does not provide insurance‐like protection for product‐related risks.

Suggested Citation

  • Seongtae Kim & Stephan M. Wagner & Claudia Colicchia, 2019. "The Impact of Supplier Sustainability Risk on Shareholder Value," Journal of Supply Chain Management, Institute for Supply Management, vol. 55(1), pages 71-87, January.
    • Handle: RePEc:bla:jscmgt:v:55:y:2019:i:1:p:71-87
    DOI: 10.1111/jscm.12188
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/jscm.12188
    Download Restriction: no
    File URL: https://libkey.io/10.1111/jscm.12188?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jscmgt:v:55:y:2019:i:1:p:71-87. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1523-2409 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.