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The spillover effects of ESG performance on the trade credit : A supplier-customer dyad perspective

Author

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  • Wang, Liukai
  • Xie, Shenghao
  • A, Na
  • Wang, Jason X.
  • Chien, Fengsheng

Abstract

While previous research has explored the effects of firm’s ESG on its financial outcomes, the spillover effect of ESG performance on trade credit, particularly within supplier-customer dyads remains underexplored. This study examines how suppliers’ ESG performance serves as a financial signal influencing customers’ trade credit decision. We investigate the moderating roles of geographic distance and supplier power, two critical yet often overlooked factors that shape the effectiveness of ESG signaling in financial transactions. Using panel data from 1,234 supplier-customer dyads, we find that higher supplier ESG performance leads to more favorable terms from customers. However, this spillover effect weakens as geographic distance increases or when suppliers hold greater supply chain power. Furthermore, a post-hoc analysis suggests that these effects are stronger in high-tech industries but diminish in regions with less regulatory oversight.

Suggested Citation

  • Wang, Liukai & Xie, Shenghao & A, Na & Wang, Jason X. & Chien, Fengsheng, 2026. "The spillover effects of ESG performance on the trade credit : A supplier-customer dyad perspective," Journal of Business Research, Elsevier, vol. 212(C).
    • Handle: RePEc:eee:jbrese:v:212:y:2026:i:c:s0148296326002535
    DOI: 10.1016/j.jbusres.2026.116218
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