The Role of Public and Buyer‐Driven Governance for Supplier Sustainability Development in China

ABSTRACT Governments and regulatory agencies in emerging countries are increasingly enforcing labor and environmental protection laws. However, how this growing public governance interrelates with existing buyer‐driven governance to influence supplier sustainability development remains unclear. To address this gap, we conducted a longitudinal case study involving two rounds of extensive data collection at nine Chinese suppliers of COSMOS, a European multinational company in the consumer electronics industry. We identify three distinctive configurations of how public governance and buyer‐driven governance jointly influence supplier sustainability development. Identifying these configurations builds on prior research that distinguishes between competitive, complementary, and coexistent interactions between public and private governance. We extend this literature by uncovering the causal mechanisms through which each configuration gives rise to a unique sustainability development trajectory. Specifically, we unpack the different elements of each configuration and analyze their influence on suppliers' willingness and ability to pursue sustainability improvement. We conclude by delineating the boundary conditions that define the generalizability of our findings across contexts.