Document Type
Article
Publication Date
1-1-2025
Abstract
We examine the role of major customers in shaping firms' environmental, social and governance (ESG) practices. We find that firms with major customer relationships undertake fewer ESG activities compared to those without such ties. The association is attenuated when institutional ownership is high, firms are less diversified, customers exhibit greater bankruptcy risk and lower switching costs and during periods of elevated equity market sentiment. Taken together, our findings highlight that reliance on a concentrated customer base can weaken firms’ incentives to engage in ESG practices, with important implications for supply chain sustainability.
Publication Source (Journal or Book title)
European Financial Management
Recommended Citation
Dong, F., Doukas, J., Walton, S., Zhang, R., & Zhang, Y. (2025). Do Major Customers Affect Firms' Environmental, Social and Governance Activities?. European Financial Management https://doi.org/10.1111/eufm.70040