The ripple effect: supplier ESG rating disagreement and customer firm resilience

ESG rating disagreement has become increasingly prevalent, yet its cross-firm spillover effects along supply chains remain underexplored. Using matched data of Chinese A-share listed companies and their suppliers from 2009 to 2024, this study employs panel fixed-effects models combined with instrumental variable approaches, propensity score matching, and other robustness checks to empirically examine the impact of supplier ESG rating disagreement on customer firm resilience. The results indicate that supplier ESG rating disagreement significantly undermines customer firm resilience. Mechanism analysis reveals that this negative effect operates through three channels: heightening reputational pressure, exacerbating financing constraints, and intensifying supply chain relationship volatility. Heterogeneity analysis demonstrates that this adverse effect is more pronounced among non-state-owned enterprises, firms with higher supplier concentration, those operating in environments with greater retail investor attention to environmental issues, and firms in more competitive industries. This study uncovers the cross-firm spillover effects of ESG rating disagreement along supply chains, offering policy implications for ESG rating standardization and supply chain risk management.