An Empirical Investigation on Supply Chain Power and Dependence on CSR Performance

Abstract

Downstream firms must pay more attention to social issues in supply chain, as stakeholders always hold them responsible for activities of their suppliers or sub-suppliers. Although many researchers have studied corporate social responsibility (CSR) and the relationship between CSR and supply chain, there is a dearth of research in the literature on how power asymmetry and joint dependence in Chinese supply chain affect the social responsibility practices of suppliers or customers and further whole supply chain. Based on resources dependence theory, this paper empirically investigated the influence of downstream power adventage (DP A) on suppliers' and whole supply chain's social performance. We also examined if joint dependence (JD) affects the social performance of the whole supply chain. We test the model using data collected from all manufacturing companies that are listed on Shenzhen or Shanghai Stock Exchange in China during 2009–2015. The results show that downstream power advantage (DPA) is positively associated with the social performance of whole supply chain and the usage of power of downstream firms can positively affect the social responsibility behaviors of their suppliers. It is interesting that there is a negative and significant relation-ship between joint dependence (JD) and downstream firms' social performance. At last, some implications of the results are discussed.