Customer Digitalization, Supplier ESG Performance, and Supply Chain Sustainability

Abstract

The rapid emergence and widespread permeation of digital technologies are driving the digital transformation of supply chains, offering an opportunity to enhance their sustainability. This paper analyzes the data of Chinese A-share listed companies and their suppliers from 2013 to 2021 and explores the impact that customer enterprises’digitalization exerts on supplier enterprises’ environmental, social, and governance (ESG) performance from the perspective of digital empowerment. This paper finds that customer enterprises’ digitalization has an enhancement effect on supplier enterprises’ ESG performance, i.e., digitalization’s empowering effect on the sustainable development of supply chains, which is an asymmetric effect. This effect is more significant when customer enterprises outshine supplier enterprises in terms of digitalization. The mechanism test shows that customer digitalization enhances supplier ESG performance primarily through two empowering effects: structural (i.e., improved supply-chain collaboration) and resource (i.e., alleviated factor constraints on suppliers). Heterogeneity analysis further reveals that this positive effect is more pronounced when local governments’ environmental attentionis higher or when the customer supplier relationship is closer. The effectiveness test shows that customer enterprises’digitalization boosts supplier enterprises’ ESG performance and helps to enhance supply chain resilience. This paper enriches the research on the influencing factors and implementation mechanisms of sustainable supply chains, broadens the research boundaries of enterprise digitalization and supply chain resilience, and provides important enlightenment for promoting the sustainable development of supply chains in China and enhancing their resilience and security.

Keywords

digitalization / environmental, social, and governance (ESG) / corporate social responsibility (CSR) / sustainability / supply chain resilience

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Higher Education Press