Sustainability Spillover in the Semiconductor Industry: A Stakeholder Salience Perspective

Abstract

AbstractThe crucial role the semiconductor sector plays in shaping national strategies and driving economic growth is widely recognised. However, at the same time, stakeholders are also concerned about the severe sustainability challenges the sector is facing and are pressing a transformation towards sustainable development. However, due to the lack of cooperation between the upstream and downstream of the semiconductor supply chain, it is not clear whether sustainability can be initiated by one supply chain agent and then transferred along the entire chain. Based on the stakeholder salience theory and archival data from Chinese listed firms in the semiconductor industry, our study finds empirical evidence that the focal company’s sustainability disclosure positively affects their suppliers’ and customers’ sustainability performance. This impact is boosted when the focal firm is a salient stakeholder to its suppliers and customers, exhibiting stronger market power, sustainability legitimacy, and a more urgent attitude in dealing with sustainability issues. Our study sheds light on existing sustainable supply chain management literature, particularly in the realm of sustainability spillover effect, and provides valuable practical insights for semiconductor managers and policymakers.

Keywords: Keywords: semiconductor industry, Sustainability, stakeholder salience, ESG