The financial impacts of environmental violations on supply chains: Evidence from an emerging market

Yangchun Xiong, Hugo K.S. Lam*, Qiaoxuan Hu, Rachel W.Y. Yee, Constantin Blome

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


Based on 100 environmental violations occurring in China in 2018 and matched supply chain relationship data obtained from Bloomberg, our research shows that environmental violations have negative financial impacts on not only the violators but also their supply chain partners including customers and suppliers. Nevertheless, environmental transparency and supply chain diversity help these supply chain partners mitigate the negative effects arising from the environmental violations. While the mitigating role of environmental transparency is more pronounced for customers than suppliers, supply chain diversity has a similar mitigating effect for both customers and suppliers.

Original languageEnglish
Article number102345
Number of pages18
JournalTransportation Research Part E: Logistics and Transportation Review
Early online date10 May 2021
Publication statusPublished - 1 Jul 2021

Bibliographical note

Funding Information:
The authors thank the Co-Editor-in-Chief, Prof. Jason Choi, and three anonymous reviewers for their insightful comments and useful suggestions, which help improve the quality of this paper. This work was partially supported by the grant from The Hong Kong Polytechnic University under grant number 1-ZVLG. Lam acknowledges the Leverhulme Trust’s support through the Leverhulme Research Fellowship (RF-2020-474).

Publisher Copyright:
© 2021 Elsevier Ltd


  • Emerging market
  • Environmental transparency
  • Environmental violation
  • Market value
  • Supply chain diversity

Cite this