The limits of local laws in global supply chains : extending governance or cutting ties? / Michael Koetter, Melina Ludolph, Hendrik Schub, Fabian Wöbbeking ; editor: Halle Institute for Economic Research (IWH) - Member of the Leibniz Association
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The limits of local laws in global supply chains
Discovery
1935635719
URN
urn:nbn:de:gbv:3:2-123456789-1177829
DOI
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Publication history
Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, 2025
Content
1 Online-Ressource (III, 22 Seiten, 0,86 MB) : Diagramme
Edition
Language
eng
Comment
Literaturverzeichnis: Seite 20-22
Abstract
We exploit an information shock related to the German Supply Chain Due Diligence Act and use detailed customs data to analyze how smaller, non-listed firms respond when expecting accountability for externalities beyond their organizational boundaries. Product-level regressions reveal a substantial reduction in imports from high ESG-risk production sectors. Adjustments occur mainly at the extensive margin, indicating that firms cut ties with high-risk suppliers. The product-level results translate into meaningful changes in overall international procurement for firms with Big Four auditors. Our findings suggest potential limits to mandates requiring firms to integrate broad sustainability considerations into operational decisions.
Series
IWH discussion papers ; 2025, no. 14 (September 2025) ppn:837399270