Dispersion vs. Integration: How Does ESG Influence Corporate Global Supply Chain Network

This study examines how ESG performance influences corporate global supply chain network, especially global supply chain concentration. We challenge the traditional static view of bargaining power by introducing a bilateral dynamic bargaining mechanism, suggesting that ESG acts as a flexible strategic resource that allows firms to manage their dependence within global supply chains. Analyzing Chinese listed firms from 2011 to 2022, we find that higher ESG performance generally leads to lower supply chain concentration, reflecting a risk-hedging approach through diversification. However, this effect depends on the capability and institutional context. Strong internal capabilities (such as digitalization), active external monitoring (analyst coverage), and developed regional markets can weaken or even reverse the dispersion trend, enabling firms to integrate the supply chain for greater efficiency. In contrast, firms in heavily polluting industries face stronger legitimacy pressures, which intensify the drive for defensive dispersion. These findings extend resource dependence theory by showing how non-market factors like ESG are translated into operational and governance changes within firms.