The purpose of this study is to investigate whether public governance quality (i.e. control of corruption and voice and accountability) and corporate governance strength (i.e. environmental committee existence) are influential in stimulating supply chain transparency and how these two governance characteristics interact in enhancing supply chain transparency.
Our investigation draws on a sample of 25,096 firm-year observations affiliated with the manufacturing industry in 50 countries and executes country-year fixed effects.
We find that the strength of control of corruption, voice and accountability is positively associated with supply chain transparency, supporting institutional theory. Furthermore, the environmental committee’s existence is positively related to sustainable supply chain transparency, confirming the upper echelons theory. The moderating analysis rejects the complementary effect but supports the substitution effect, confirming the negative moderating role of the environmental committee between the control of corruption and voice and accountability and sustainable supply chain transparency.
No empirical study has drawn on an international sample to (1) explicate the worldwide adoption of sustainable supply chain transparency, (2) link corruption and accountability to green supply chain transparency or (3) investigate how sustainable supply chain transparency is affected by the interplay of institutions and environmental management committees. Thus, we highlight the substitutive or complementary role of internal and external governance mechanisms in inciting firms toward greener supply chain management by developing a novel sustainable supply chain transparency index that draws on five indicators.
