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Field
Trial Title
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Before
Delegation, Monitoring, and Incentives: A Field Experiment in Supply Chain Governance
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After
Delegation, Monitoring, and Supplier Engagement: A Field Experiment in Supply Chain Governance
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Field
Abstract
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Before
This paper investigates how firms can design governance structures to manage complex objectives in global supply chains. We conduct a randomized controlled trial (RCT) with a large publicly listed firm in China and its network of 149 suppliers, testing how horizontal and vertical allocations of authority affect supplier behavior. Guided by theories of multitasking (Holmström & Milgrom, 1991) and delegation (Aghion & Tirole, 1997), the intervention independently varies the strength of incentives tied to future orders, the scope of third-party auditing, and the specification of environmental, social, and governance (ESG) key performance indicators. Supplier outcomes are measured through a centralized data platform that tracks supplier engagement (data completeness, documentation), objective performance (over 30 ESG indicators), and extensive-margin decisions (contract renewal). The findings aim to provide empirical insights into effective governance structures for sustainable supply chains, addressing the increasing stakeholder and regulatory demands for corporate social responsibility in emerging markets.
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After
We conduct a 2x2 factorial field experiment with a leading Chinese apparel brand and 155 of its suppliers to study how governance structure shapes supplier compliance with multi-dimensional reporting mandates. We independently vary decision authority (mandate versus delegation of KPI selection) and monitoring scope (comprehensive versus targeted carbon audit). Contrary to classical organizational theory, simpler governance structures generate substantially higher engagement among capacity-constrained small and medium-sized enterprises. Mandating a fixed KPI set reduces the missing-data rate by 10.4 percentage points relative to the control mean, while delegating KPI choice yields a negligible effect. Targeted carbon audits raise documentation coverage by 0.857 additional categories, roughly four times the effect of comprehensive audits. The two interventions are mutually reinforcing, with gains concentrated among smaller suppliers and in environmental reporting, where measurement standards are clearer and coordination costs are lower. We develop a model of bandwidth-constrained compliance that rationalizes these patterns and draw implications for the private regulation of externalities in global value chains.
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Field
Trial End Date
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Before
March 31, 2026
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After
June 30, 2026
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Field
JEL Code(s)
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Before
C93, D23, L22, L23, M14, Q56
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After
C93, D23, L14, M14, Q56
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Field
Last Published
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Before
October 29, 2025 04:06 AM
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After
April 09, 2026 03:21 AM
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Field
Intervention (Public)
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Before
Targeted versus comprehensive ESG data verification, strong versus weak incentive structure, and mandated versus self-selected ESG improvement metrics in supply chain management
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After
Targeted versus comprehensive ESG data verification and mandated versus self-selected ESG improvement metrics in supply chain management
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Field
Experimental Design (Public)
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Before
Control;
T1 (Vertical Intervention): T1A (Mandated ESG Improvement Metrics) versus T1B (Self-Selected ESG Improvement Metrics);
T2 (Horizontal Intervention): T2A (Comprehensive ESG Data Verification) versus T2B (Targeted ESG Data Verification), and T2C (Weak Incentive) versus T2D (Strong Incentive)
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After
Control;
T1 (Vertical Intervention): T1A (Mandated ESG Improvement Metrics) versus T1B (Self-Selected ESG Improvement Metrics);
T2 (Horizontal Intervention): T2A (Comprehensive ESG Data Verification) versus T2B (Targeted ESG Data Verification)
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Field
Randomization Method
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Before
Block Randomization
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After
Stratified Randomization
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Field
Planned Number of Observations
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Before
149 firms * 12 months
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After
155 firms * 12 months
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Field
Sample size (or number of clusters) by treatment arms
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Before
Roughly 50 firms in control and 50 firms in each of the treatment arms (T1A-T2D)
* Note that our treatment arms are cross-cutting with each other to investigate the interaction between different combinations of management practices
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After
Roughly 50 firms in control and 50 firms in each of the treatment arms (T1A, T1B, T2A, T2B)
* Note that our treatment arms are cross-cutting with each other to investigate the interaction between different combinations of management practices
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Field
Additional Keyword(s)
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Before
Environmental, Social, and Governance (ESG), Corporate Social Responsibility (CSR), Supply Chain Management, Randomized Controlled Trial (RCT), Multitasking, Delegation
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After
Supply Chain Governance, ESG Reporting, Field Experiment, Delegation, Multitasking, Organizational Bandwidth, SMEs, Private Regulation
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