IDEAS home Printed from https://ideas.repec.org/a/eee/finana/v104y2025ipas1057521925003795.html
   My bibliography  Save this article

The impact of supply chain international embedment on ESG performance: Evidence from China

Author

Listed:
  • Hao, Ying
  • Hu, Dan
  • Huang, Lixin
  • Yin, Ziqi

Abstract

Customer requirements are an important aspect of explaining corporate behavior, especially supplier behavior in emerging economies. This paper examines the role of the international supply chain in the improvement of corporate ESG performance in emerging economies. Using novel data on engagements of the international supply chain with Chinese firms, we find evidence that firms with major foreign customers improve their ESG ratings and the improvement is most pronounced for firms with stronger connectivity along the supply chain. Consistent with customers' ESG signaling being effective, customers convey their preferences for improved ESG by engaging with firms they already work with, especially for the supply chain partners with more efficient signal transmission. Based on the supply chain and business operations, suppliers also respond to customers' ESG requirements, and suppliers with high supply chain disruption losses and favorable operating conditions are likely to observe improvements in ESG. Finally, suppliers benefit from the collaborative ESG efforts along the supply chain by achieving an increase in operating efficiency and sales share to international customers. Collectively, our findings provide novel evidence on the causal effect of customer requirements on corporate ESG ratings.

Suggested Citation

  • Hao, Ying & Hu, Dan & Huang, Lixin & Yin, Ziqi, 2025. "The impact of supply chain international embedment on ESG performance: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 104(PA).
    • Handle: RePEc:eee:finana:v:104:y:2025:i:pa:s1057521925003795
    DOI: 10.1016/j.irfa.2025.104292
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1057521925003795
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.irfa.2025.104292?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    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:eee:finana:v:104:y:2025:i:pa:s1057521925003795. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620166 .

    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.