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Hiding in the supply chain: Investigating supplier eco-innovations when buyer and supplier have common owners

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  • Liu, Zhen-yuan (Ralph)
  • Li, Yu-min
  • Tse, Ying Kei (Mike)
  • Tan, Kim Hua
  • Kumar, Ajay

Abstract

Common owners along the supply chain (COSC) indicate shareholders who simultaneously hold the equity stakes of upstream suppliers and downstream buyers. Despite the burgeoning interest in COSC's influences on supply chain actors' practices, its impact on supplier eco-innovations remains unexplored. Drawing on resource dependence theory, this paper proposes a set of competing hypotheses to critically investigate the relationship between COSC and supplier eco-innovations and the moderating roles of suppliers' internal environmental awareness and external legitimate pressure. Analysing a unique dataset of 1841 buyer-supplier pair-year observations of Chinese A-share listed firms between 2003 and 2021, we find that COSC functions as a new form of shadow governance within the supply chain to hamper supplier eco-innovations. However, such the negative effect can be converted into positive ones when suppliers obtain higher environmental awareness, encounter more stringent environmental regulations, and receive intensified media coverage. The results remain robust under various robustness checks, yielding important implications for managerial practice and policy development.

Suggested Citation

  • Liu, Zhen-yuan (Ralph) & Li, Yu-min & Tse, Ying Kei (Mike) & Tan, Kim Hua & Kumar, Ajay, 2026. "Hiding in the supply chain: Investigating supplier eco-innovations when buyer and supplier have common owners," Technological Forecasting and Social Change, Elsevier, vol. 222(C).
    • Handle: RePEc:eee:tefoso:v:222:y:2026:i:c:s0040162525004408
    DOI: 10.1016/j.techfore.2025.124409
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