Environmental Performance, Strategic Partner Support, and Performance Backsliding in Supply Chains

ABSTRACT Supply chains are clearly instrumental to firm‐level environmental performance. Yet in research examining these effects, distinctions between arms‐length relationships (largely transactional buyers and suppliers) and other influencers, such as strategic research partners (i.e., entities who jointly maintain legal commitments to shared knowledge and resources, with common service or product development interests) are often ambiguous. In our work, we aim to investigate this distinction. Combining arguments that reflect institutional theory, stakeholder theory, and expectancy disconfirmation theory, we anticipate positive associations between the environmental performance of strategic partners and the future performance of related focal firms. We posit these associations to be more easily observable than those between a firm and its arms‐length relations. We further suggest that, due to the level of integration and codependency with strategic research partners, losses in environmental performance (backsliding) will be associated with dampened links between strategic partner performance and subsequent firm performance. By weaving together evidence from thousands of firm‐year observations, merging representative fields from FactSet, CSRHub, and Compustat sources, we find support for these associations. Implications for future research and practice are discussed.