Extending Social Sustainability to Suppliers: The Role of GVC Governance Strategies and Supplier Country Institutions

Sarah Castaldi*, Miriam M. Wilhelm, Sjoerd Beugelsdijk, Taco van der Vaart

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

The disaggregation and geographic dispersion of global value chains (GVCs) have expanded the responsibility of international buyers from firm-level corporate social responsibility (CSR) towards social sustainability of their emerging country suppliers. We theorize, in this paper, that the effectiveness of lead firms’ GVC governance strategies for social sustainability—which can be audit-based or cooperation-based—depends on the local institutional context of the supplier. Supplier country institutions exert legal and civil society pressures for social sustainability, which shape suppliers’ attitude and receptiveness towards lead firm requests. Using unique primary data from 356 garment and footwear suppliers in 11 emerging countries, which supply to Western European or North American buyers, we show that GVC governance strategies are particularly effective for suppliers’ social sustainability implementation when there is ‘contextual fit’ with local institutional pressures for social sustainability in the supplier country. Our study identifies the boundary conditions of GVC governance modes, and demonstrates a complementary relationship between organizational arrangements and their institutional-level counterparts in the context of social sustainability.
Original languageEnglish
JournalJournal of Business Ethics
Number of pages24
ISSN0167-4544
DOIs
Publication statusPublished - 16 Mar 2022

Bibliographical note

Epub ahead of print. Published online: 16 March 2022.

Keywords

  • Global value chain
  • GVC governance strategy
  • Social sustainability
  • Supplier country institutions

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