How does supplier CSR performance help to expand exchange relationships with major buyers? The moderating role of supply‐side and demand‐driven uncertainty

Abstract

Abstract Most studies of corporate social responsibility (CSR) performance in a supply chain context have been conducted from the buyer's perspective. Few have paid attention to how suppliers leverage this kind of performance to expand exchange relationships with major customers. From a resource dependence and social exchange perspective, this article specifically examines whether two supplier CSR performance dimensions— environmental and product performance—can serve as a mechanism to expand a supplier's relationships with a smaller number of major buyers, where its increasing exchange dependence often measures this factor. Moreover, these dependent relationships may further develop and change under different conditions of uncertainty. Using large‐scale longitudinal data to test the proposed model, we find empirical evidence that a supplier's environmental and product performance relate positively to greater customer dependence and improved financial performance across diverse sets of industries. However, the findings also reveal that both demand‐driven and supply‐side uncertainty can weaken the effect. Specifically, the positive effect of environmental performance tends to weaken in the face of supply‐side uncertainty, whereas the positive effect of product performance tends to weaken amid demand‐driven uncertainty. Accordingly, we note important nuances and contingencies for suppliers to consider when considering how investments in these CSR performance dimensions affect exchange dependence.