How do suppliers respond to institutional complexity? Examining voluntary public environmental disclosure in a global manufacturing supply network

Abstract

AbstractWhen making decisions about their commitments to environmental practices and performance, suppliers face heterogenous institutional logics and their diverse prescriptions for action. How do suppliers respond to such institutional complexity? We examine this question in the context of suppliers' voluntary public environmental disclosures (disclosure). Specifically, our study assembles a unique panel data set of global manufacturing suppliers and their annual contractual relationships with buyers. Building on the institutional logics perspective and the sustainable supply network literature, we hypothesize that suppliers selectively mimic the disclosure of their buyers by following market, corporate, and sustainability logics. Our study contributes to the institutional logics perspective and the sustainable supply network literature by indicating that in the context of disclosure, market and sustainability logics both actively shape suppliers' responses to institutional complexity. Furthermore, we find support for mimicry as a mechanism of buyer influence that can lead to disclosure heterogeneity across suppliers even when they follow the same logic, which opens new avenues for research. Our findings can be leveraged by buyers, policymakers, and other stakeholders interested in advancing transparency and sustainability in supply networks.