How does supplier CSR performance help to expand exchange relationships with major buyers? The moderating role of supply-side and demand-driven uncertainty

Abstract

Most studies of corporate social responsibility (CSR) performance in a supply chain context have been conducted from the buyer's perspective. Few have paid attention to how suppliers leverage this kind of performance to expand exchange relationships with major customers. From a resource dependence and social exchange perspective, this article specifically examines whether two supplier CSR performance dimensions—environmental and product performance—can serve as a mechanism to expand a supplier's relationships with a smaller number of major buyers, where its increasing exchange dependence often measures this factor. Moreover, these dependent relationships may further develop and change under different conditions of uncertainty. Using large-scale longitudinal data to test the proposed model, we find empirical evidence that a supplier's environmental and product performance relate positively to greater customer dependence and improved financial performance across diverse sets of industries. However, the findings also reveal that both demand-driven and supply-side uncertainty can weaken the effect. Specifically, the positive effect of environmental performance tends to weaken in the face of supply-side uncertainty, whereas the positive effect of product performance tends to weaken amid demand-driven uncertainty. Accordingly, we note important nuances and contingencies for suppliers to consider when considering how investments in these CSR performance dimensions affect exchange dependence.