How do customers’ environmental efforts diffuse to suppliers: the role of customers’ characteristics and suppliers’ digital technology capability

Abstract

PurposeThe growing attention to green supply chain transparency prompts firms to disclose their environmental efforts and manage environmental issues along supply chains. Drawn upon diffusion theory, this study aims to investigate how customers’ environmental efforts can be diffused to suppliers for similar actions, as well as how customers’ (diffusors’) characteristics and suppliers’ (followers’) capability in digital technology application moderate the relationship.Design/methodology/approachThis study collects secondary data of 1,514 unique customer-supplier dyad year observations of Chinese listed firms and their disclosed environmental efforts from 2009 to 2022. A fixed-effect regression model is used to test the hypotheses.FindingsThis study reveals a positive association between customers’ disclosed environmental efforts and those of their suppliers. Furthermore, the relationship is strengthened when customers are state-owned or when suppliers possess higher levels of digital technology application capability. These findings remain robust when alternative measures of variables are employed.Originality/valueThis study contributes to the supply chain transparency literature by uncovering the diffusion mechanism of environmental efforts from customers to their suppliers. It further identifies moderators for this diffusion, including customers’ (diffusors’) ownership and suppliers’ (followers’) capability. Lastly, our study extends the applicability of diffusion theory within a buyer–supplier context.

Guest editorial: Supply chain transparency: opportunities, challenges and risks

“…It facilitates firms to effectively identify potential risks and opportunities in SCs. Consequently, future research could delve into exploring and appraising the SCT in complex multi-tiered supplier and customer networks (Feng and Zhu, 2024). It may be insightful to explore the role of intermediaries or third-party auditors in promoting cross-tier SCT, as well as the potential of standardization or certification processes to simplify information sharing.…”