Journal of Business Ethics

, Volume 121, Issue 4, pp 543–557 | Cite as

Do Suppliers Applaud Corporate Social Performance?

Article

Abstract

The influence of corporate social performance (CSP) on stakeholders is one of the focal issues in corporate social responsibility (CSR) research. Using data of listed companies in China, this paper examines whether CSR behavior in the form of charitable donations garners a positive reaction from suppliers. Results derived from both level and change model regressions show that superior CSP makes it easier for a firm to obtain trade credit from suppliers, although the effect is significant only in non-state-owned enterprises (non-SOEs). The results are robust to various measures of CSP and endogeneity tests. The results support the strategic philanthropy view and apply stakeholder theory in supply chain, that strategic CSR can help firms to attract suppliers and consolidate cooperative relationships with them, which in turn benefits the firms in terms of more trade credit financing from suppliers. This paper also shows that state-owned enterprises and non-SOEs have different CSR intentions and use CSR to achieve strategic goals in different ways. The conclusions drawn from this study provide practical guidance on CSR strategy, suggesting that CSR activities can help a firm in transition economies to enhance its corporate image, establish and consolidate the good relationship with suppliers, and obtain economic benefits or achieve long-term business objectives.

Keywords

Corporate social responsibility Corporate social performance Stakeholders Suppliers Trade credit 

Notes

Acknowledgments

This paper is supported by the National Natural Science Foundation of China (Nos. 71002032 and 71102118), the Fundamental Research Funds for the Central Universities, the Research Funds of Renmin University of China (Nos. 11XNJ006, 11XNK030), 2012 merit-based scientific and technological projects to returned scholars from overseas by Beijing Municipality and Beijing Municipal Commissions of Education (Research Base- Science & Technology Innovation Platform-Accounting-based Investor Protection) (PXM_014213_000031).

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Copyright information

© Springer Science+Business Media Dordrecht 2013

Authors and Affiliations

  1. 1.Business School, Renmin University of ChinaBeijingChina
  2. 2.Business School, China Center for Venture Capital Research, Beijing Technology and Business UniversityBeijingChina

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