Upstream or Downstream? Suppliers-Customer CSR Performance Links

Abstract

This study examines corporate social responsibility (CSR) performance between suppliers and customers within supply chain networks. Based on the spillover and stakeholder pressure theories, we argue that there is a spillover of CSR performance between suppliers and customers as well as downstream-upstream pressures to satisfy stakeholder demands for stronger CSR performance. Using a sample of 5,451 suppliers and 2,520 customers of U.S. firms from 1993 to 2013, we find evidence to support our hypothesis. We find that CSR performance in downstream (customers’) CSR influences the CSR performance of the upstream (suppliers’) supply chain partners but not vice versa. While extant literature in the supply chain has examined the suppliers-customers’ research and development innovations, our study extends this literature to suppliers-customers’ social innovations by establishing a link between suppliers and customers CSR performance through supply chain networks.