Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments June 7, 2022 erstellt
Description:
The equal employment opportunity (EEO) policy is an essential component of workplace diversity, equity, and inclusion (DEI) practices. This paper examines whether principal customer firms infuse EEO policy in their dependent suppliers. Specifically, using a novel workplace EEO measure based on the textual analysis of online job postings, we demonstrate a lead-lag pattern of workplace EEO policies between customers and suppliers, suggesting that the suppliers adjust workplace EEO practices to cater to their principal customers. This effect is more pronounced when the principal customers enjoy a stronger bargaining power. To alleviate the endogeneity concerns, we use the adoption of the California Board Diversity Law in 2018 as the exogenous shock to support a causal interpretation of our findings. Furthermore, the supplier’s adverse workplace EEO incidents will increase the likelihood of supply chain relationship termination, especially when the customer’s workplace EEO level is high. At last, we find that higher customer workplace EEO levels boost suppliers’ innovation performance, measured by patent quantity and quality, suggesting economic benefits associated with the diffusion of workplace EEO practices along supply chains