Does Good Treatment Travel Downstream? Buyer Support and Responsible Governance in Multi-Tier Supply Chains

Abstract

Sustainable supply-chain governance often depends on firms that occupy more than one relational role. A middle-tier firm may receive support from an upstream buyer while simultaneously governing its own subcontractors. This study examines whether support received from an upstream buyer is associated with more responsible governance toward subcontractors, and whether buyer pressure is negatively associated with such governance. Using five waves of the Korean Workplace Panel Survey (2015–2023), we identify 574 dual-role firms, yielding 1134 firm-year observations. The results show that buyer support is positively associated with responsible subcontractor governance in both contemporaneous and next-wave models. Buyer pressure, by contrast, is negatively associated with subcontractor governance in contemporaneous models, but this association does not persist in next-wave specifications. These findings suggest that everyday relational treatment may matter beyond the immediate dyad. The study extends multi-tier sustainability research beyond the cascading of explicit standards by showing how relational experiences received by dual-role firms in upstream-facing relationships are associated with how those same firms govern downstream-facing subcontracting relationships.