Customer concentration and corporate carbon emissions
This paper examines whether economic links with major corporate customers curb corporate carbon emissions. We show that supplier firms with a concentrated customer base have significantly lower carbon emissions. The baseline results are robust to alternative measures of carbon emissions and customer...
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| Main Authors: | , , , |
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| Format: | text |
| Language: | English |
| Published: |
Institutional Knowledge at Singapore Management University
2022
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| Subjects: | |
| Online Access: | https://ink.library.smu.edu.sg/lkcsb_research/7090 https://ink.library.smu.edu.sg/context/lkcsb_research/article/8089/viewcontent/SSRN_id4180681__1_.pdf |
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| Institution: | Singapore Management University |
| Language: | English |
| Summary: | This paper examines whether economic links with major corporate customers curb corporate carbon emissions. We show that supplier firms with a concentrated customer base have significantly lower carbon emissions. The baseline results are robust to alternative measures of carbon emissions and customer concentration, and various approaches that mitigate endogeneity concerns due to omitted variables and reverse causality. Moreover, the curbing effect of customer concentration on supplier carbon emissions is more pronounced in firms facing lower customer switching costs, with less (more) supplier (customer) bargaining power, fewer redeployable assets, operating in more carbon-intensive industries, and after the Paris Agreement of 2015. Collectively our evidence suggests that major corporate customers can facilitate the transition to a low-carbon economy through decarbonization along the supply chain. |
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