Green Image Management in Supply Chains: Strategic Disclosure of Corporate Suppliers

50 Pages Posted: 12 Oct 2020 Last revised: 16 Aug 2023

See all articles by Yilin Shi

Yilin Shi

The Chinese University of Hong Kong (CUHK) - CUHK Business School

Jing Wu

The Chinese University of Hong Kong (CUHK) - CUHK Business School

Yu Zhang

Peking University - Guanghua School of Management

Yuqing Zhou

The Chinese University of Hong Kong (CUHK) - CUHK Business School

Date Written: July 25, 2020

Abstract

This paper examines how firms manage their disclosure of customer-supplier relationships to create a favorable green image in their supply chain. Our study finds strong evidence that firms strategically disclose relationships with environmentally responsible (“good”) suppliers while withholding relationships with “bad” suppliers, ceteris paribus. This strategic disclosure is particularly pronounced for firms with a worse ESG rating, a greater concern for their brand image, and a higher level of institutional ownership. Additionally, it tends to increase as public awareness of climate change grows and decreases as regulations on environmental information transparency strengthen. Furthermore, we find that firms engaging in strategic disclosure of “green” suppliers experience higher future stock returns and asset turnover, indicating that investors and consumers may not fully understand the implications of such disclosure.

Keywords: strategic disclosure, environmental, social, and governance (ESG), supply chain management, green image

JEL Classification: M41, M11, M14

Suggested Citation

Shi, Yilin and Wu, Jing and Zhang, Yu and Zhou, Yuqing, Green Image Management in Supply Chains: Strategic Disclosure of Corporate Suppliers (July 25, 2020). Available at SSRN: https://ssrn.com/abstract=3700310 or http://dx.doi.org/10.2139/ssrn.3700310

Yilin Shi

The Chinese University of Hong Kong (CUHK) - CUHK Business School ( email )

Cheng Yu Tung Building
12 Chak Cheung Street
Shatin, N.T.
Hong Kong

Jing Wu (Contact Author)

The Chinese University of Hong Kong (CUHK) - CUHK Business School ( email )

Cheng Yu Tung Building
12 Chak Cheung Street
Shatin, N.T.
Hong Kong

HOME PAGE: http://www.jingwulab.org

Yu Zhang

Peking University - Guanghua School of Management ( email )

Peking University
Beijing, Beijing 100871
China

Yuqing Zhou

The Chinese University of Hong Kong (CUHK) - CUHK Business School ( email )

Cheng Yu Tung Building
12 Chak Cheung Street
Shatin, N.T.
Hong Kong

HOME PAGE: http://www.yuqingzhou.com/

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