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Small worlds within global supply chains: implications for multinational enterprises’ environmental, social, and governance controversies

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  • Sangho Chae

    (University of Warwick)

  • Igor Filatotchev

    (King’s College London)

  • Seongtae Kim

    (Aalto University)

  • Byung-Gak Son

    (University of London)

Abstract

With increasing public attention to corporate sustainability, environmental, social, and governance (ESG) controversies emerging in global supply chains present a growing problem for multinational enterprises (MNEs). This paper investigates whether MNEs with geographically dispersed suppliers are more likely to be exposed to supplier-related ESG controversies. It also explores structural characteristics of global supply chains that can mitigate MNEs’ exposure to such controversies. Building on the literature on supply chain complexity and small-world networks, we suggest that the small-worldness of an MNE’s supply chain network can mitigate the impact of the geographical dispersion of suppliers on supplier-induced ESG controversies. Our analysis of the Fortune 500 largest U.S. companies from 2010 to 2019 reveals that MNEs with geographically dispersed suppliers suffer from more supplier-induced ESG controversies, while small-worldness attenuates such impact. Our findings contribute to the international business literature by highlighting small-worldness as a network structural characteristic that can be deployed by MNEs to mitigate the negative impacts of supply chain spatial complexity.

Suggested Citation

  • Sangho Chae & Igor Filatotchev & Seongtae Kim & Byung-Gak Son, 2025. "Small worlds within global supply chains: implications for multinational enterprises’ environmental, social, and governance controversies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 56(6), pages 807-818, August.
    • Handle: RePEc:pal:jintbs:v:56:y:2025:i:6:d:10.1057_s41267-025-00796-w
    DOI: 10.1057/s41267-025-00796-w
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