Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/301393 
Year of Publication: 
2024
Citation: 
[Journal:] Journal of Development Economics [ISSN:] 1872-6089 [Volume:] 167 [Article No.:] 103236 [Publisher:] Elsevier [Place:] Amsterdam [Year:] 2024 [Pages:] 1-31
Publisher: 
Elsevier, Amsterdam
Abstract: 
Locating substantial parts of the production process in developing and emerging economies, many firms face an increasing demand by stakeholders for Corporate Social Responsibility (CSR) along their value chains. Contractual incompleteness between firms and their suppliers at different stages of production can exacerbate the ability to meet these demands. We analyze a model of sequential production with incomplete contracts where CSR by independent suppliers differentiates the final product in the eyes of caring consumers. Progressing down the value chain, our model predicts an increasing CSR profile from upstream suppliers with low CSR to downstream suppliers with higher CSR. We confirm this prediction using Indian firm-level data – computing a firm’s value chain position by combining its product-level sales information with the World Input–Output Database. We find that more downstream firms report higher CSR expenditures as measured by a combination of staff welfare spending and social community spending.
Subjects: 
Corporate Social Responsibility
Global value chains
Incomplete contracts
Sustainable development
Ethical sourcing
India
JEL: 
F12
F61
F63
L23
M14
O12
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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