How corporate social responsibility auditing interacts with supply chain information transparency

The burgeoning digital economy has expanded the information gap in supply chains. Supply chain information transparency has thus attracted increasing attention from both industry and academia. Meanwhile, as consumers pay more attention to corporate social responsibility (CSR), firms have made efforts to audit their suppliers to avoid CSR violations. This paper explores the strategic role of CSR auditing in supply chain information transparency. We examine how CSR auditing interacts with supply chain information transparency by considering a scenario where a firm strategically sells either a single product or a product line through an online retail platform. Our results show that when the product line strategy is uncertain, the firm’s audit commitment strengthens the platform’s incentive to voluntarily disclose information. Our results also show that when the length of the product line is unchangeable, the platform prefers to share the information even if the firm does not make audit commitments. Additionally, when the platform’s information sharing decision and the firm’s product line design are made simultaneously, the platform may choose to privately withhold the information if the product line extension cost is in the moderate range and the demand loss from CSR-concerned consumers is relatively minor.