Leveraging Knowledge Networks for Environmental Performance: The Role of Second-Order Social Capital in Manufacturing CSR Initiative

Abstract Manufacturing firms face increasing pressure to balance corporate social responsibility (CSR) with environmental performance (EP) while managing complex stakeholder relationships. Despite growing recognition of CSR’s importance for sustainability, the mechanisms through which CSR translates into tangible environmental outcomes remain underexplored, particularly regarding the role of extended stakeholder networks. This study addresses this gap by introducing a theoretical framework examining how CSR initiatives influence EP through the lens of second-order social capital (SOSC), which captures indirect social resources derived from customer and supplier networks. The research framework, grounded in social exchange theory and a resource-based view, develops and validates a comprehensive measurement tool specifically designed for manufacturing industries. Using survey data from 307 middle and senior-level managers in Taiwan’s manufacturing sector and employing the partial least squares structural equation model (PLS-SEM). The empirical analysis reveals that CSR directly and indirectly impacts EP through SOSC. Furthermore, CSR demonstrates a strong positive relationship with SOSC, while SOSC significantly influences EP. The mediation analysis confirms that SOSC serves as a significant intermediary mechanism, explaining how CSR initiatives cascade through extended network relationships to enhance EP. The findings offer practical implications for marketing managers and information systems professionals in designing integrated CSR strategies that effectively utilise customer and supplier relationships to improve EP, particularly in Asian manufacturing contexts where relationship-based business practices are prominent.