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Shareholder value implications of supply chain ESG: evidence from negative incidents

Author

Listed:
  • Xuanpu Lin

    (University of Hong Kong)

  • Guoman She

    (University of Hong Kong)

  • Aaron Yoon

    (Northwestern University)

  • Haoran Zhu

    (Southern University of Science and Technology)

Abstract

Using a novel measure that captures negative ESG incidents at both listed and private suppliers, we provide large-scale evidence on the value implications of supply chain ESG. We find that firms with fewer supply chain ESG incidents exhibit higher future accounting performance and that this effect is stronger in the presence of more conscious customers and vulnerable supply chains. We also find that firms with robust supply chain ESG exhibit higher future stock returns and that this effect is more pronounced when information frictions are higher, which suggests that it takes time for the market to understand the value implications of supply chain ESG. Overall, we highlight the benefits of managing supply chain ESG and the decision usefulness of the related information.

Suggested Citation

  • Xuanpu Lin & Guoman She & Aaron Yoon & Haoran Zhu, 2025. "Shareholder value implications of supply chain ESG: evidence from negative incidents," Review of Accounting Studies, Springer, vol. 30(3), pages 2185-2217, September.
    • Handle: RePEc:spr:reaccs:v:30:y:2025:i:3:d:10.1007_s11142-025-09903-6
    DOI: 10.1007/s11142-025-09903-6
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    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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