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

TY - JOUR

T1 - The financial impacts of environmental violations on supply chains

T2 - Evidence from an emerging market

AU - Xiong, Yangchun

AU - Lam, Hugo K.S.

AU - Hu, Qiaoxuan

AU - Yee, Rachel W.Y.

AU - Blome, Constantin

N1 - 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

PY - 2021/7/1

Y1 - 2021/7/1

N2 - 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.

AB - 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.

KW - Emerging market

KW - Environmental transparency

KW - Environmental violation

KW - Market value

KW - Supply chain diversity

UR - http://www.scopus.com/inward/record.url?scp=85105584386&partnerID=8YFLogxK

U2 - 10.1016/j.tre.2021.102345

DO - 10.1016/j.tre.2021.102345

M3 - Article

AN - SCOPUS:85105584386

SN - 1366-5545

VL - 151

JO - Transportation Research Part E: Logistics and Transportation Review

JF - Transportation Research Part E: Logistics and Transportation Review

M1 - 102345

ER -