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Do customer ESG performance affect supplier innovation? Evidence from China's listed firms

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  • Lian, Yonghui
  • He, Xiaoyue
  • Gao, Jieying

Abstract

In the context of the growing importance of sustainable supply chain management, we investigate the impact of customer ESG performance on supplier innovation using a paired sample of Chinese customer-supplier data from 2009 to 2020. The results show that favorable customer ESG performance is positively associated with supplier innovation, and the association is particularly pronounced when the supplier is more digitally transformed or geographically closer to the customer.

Suggested Citation

  • Lian, Yonghui & He, Xiaoyue & Gao, Jieying, 2023. "Do customer ESG performance affect supplier innovation? Evidence from China's listed firms," Economics Letters, Elsevier, vol. 233(C).
    • Handle: RePEc:eee:ecolet:v:233:y:2023:i:c:s016517652300397x
    DOI: 10.1016/j.econlet.2023.111372
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    References listed on IDEAS

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    Cited by:

    1. Renhong Wu & Jinbao Li & Yunhai Dai & Xiangdong Shen & Md. Alamgir Hossain, 2024. "Impact of Environmental, Social, and Governance on Innovation in Chinese Listed Firms," Sustainability, MDPI, vol. 16(17), pages 1-24, August.
    2. Gao, Xiang & He, Xixi & Sun, Chuanwang & Wu, Dongmei & Zhang, Jie, 2025. "Innovation in shouldering green responsibility: ESG performance and green technology innovation," Energy Economics, Elsevier, vol. 142(C).
    3. Li, Longda, 2024. "The environmental spillovers of buyers' digital transformation: Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 209(C).
    4. Lien, Donald & Wang, Lie-Huey, 2025. "ESG peer spillover effect in supply chain: Evidence from Taiwan semiconductor industry," International Review of Economics & Finance, Elsevier, vol. 100(C).
    5. Mao, Qilin & Shi, Buchao, 2026. "Intelligent manufacturing and green innovation along the supply chain," Economic Modelling, Elsevier, vol. 154(C).
    6. Gan, Zhongxin & Yusupov, Nurmukhammad, 2025. "Supply chain ESG and green innovation at midstream firms: An integrated approach with both supplier and buyer sides," Research in International Business and Finance, Elsevier, vol. 78(C).
    7. Xu, Hecong & Wang, Xiao, 2025. "Promoting suppliers’ R&D investment: The power from climate risk-exposed customers," Economics Letters, Elsevier, vol. 257(C).
    8. Lulu Huang & Qiannan Liu, 2024. "The Impact of Natural Disasters on Corporate ESG Performance: Evidence from China," Sustainability, MDPI, vol. 16(12), pages 1-14, June.
    9. Zhao, Shuai & Chen, Yan, 2024. "ESG rating and labor income share: Firm-level evidence," Finance Research Letters, Elsevier, vol. 63(C).
    10. Ma, Yisen & Song, Caixia, 2025. "The impact of ESG on firms’ export technology complexity," Finance Research Letters, Elsevier, vol. 72(C).

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    Keywords

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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O36 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Open Innovation

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