Events

Dr. Jing Wu
Assistant Professor
Department of Decision Sciences and Managerial Economics
CUHK Business School, Chinese University of Hong Kong

Perception regarding a focal firm’s green image depends not only on itself but also on its known suppliers. This paper provides the first empirical evidence linking CSR and supply chain information disclosure together. Specifically, we uncover robust evidence showing that firms voluntarily disclose relationships with environmentally responsible (“good”) suppliers while selectively not disclosing relationships with “bad” suppliers. An instrumental variable approach using temperature volatility around the world supports a causal interpretation of our finding. Such corporate behavior increases with growing public awareness of climate change and decreases with strengthened regulations on CSR information transparency. This observation is more salient for firms that face greater competition or care more about their brand awareness and for firms that have more significant holdings by institutional investors. Firms that selectively disclose “green” suppliers experience increases in sales and valuation, suggesting that consumers and investors do not fully take this behavior into account.