Work

ESG Shocks in Global Supply Chains

Year: 2026

Type: article

Abstract: We show that U.S. firms cut imports by 31.8% when their international suppliers experience environmental and social (E&S) incidents. These trade cuts are larger for publicly listed U.S. importers facing high E&S investor pressure and lead to cross-country supplier reallocation, suggesting that E&S preferences in capital markets can be privately costly but have real effects for foreign suppliers. Larger trade cuts around the incident result in better supplier E&S performance in subsequent years and in the eventual resumption of trade. Our results highlight the role of investors in ensuring suppliers’ E&S compliance along global supply chains.

Source: Review of Financial Studies

DOI: 10.1093/rfs/hhag001

Authors: Emilio Bisetti, Guoman She, Alminas Žaldokas

Institutions: Hong Kong University of Science and Technology, National University of Singapore

Language: English

Topic: Corporate Social Responsibility Reporting

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $4,028

OpenAlex ID: W7124843297

FWCI: 112

Cites: 52

Cited by: 44

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