This study explores how contagion effects within supply chains are shaped by specific relational and reputational factors, focusing on how buyers influence their suppliers' environmental stewardship. Contagion effects refer to the phenomenon where certain behaviors, reflected through observable practices, spread through buyer-supplier networks, in this case, environmental behaviors from buyers to their suppliers. Drawing upon Social Contagion Theory, we examine both positive and negative contagion effects, driven by a buyer's environmental performance and ESG-related reputational risk, respectively. The study finds that a buyer's strong environmental performance does not directly lead to improved supplier stewardship. However, when suppliers are more relatively dependent on the buyer, the positive contagion effect is more likely to emerge, enhancing suppliers' observable environmental stewardship behaviors. Conversely, a buyer's ESG-related reputational risk does not inherently result in poor supplier environmental stewardship, though the positive contagion effect may be weakened when the buyer faces higher ESG risks. The study employs a Tobit regression model, analyzing data from 678 buyer-supplier dyads within the manufacturing sector. These findings contribute to the literature by highlighting the conditional nature of contagion effects in supply chains and providing managerial insights into how buyers can effectively promote supplier environmental stewardship.
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