An investigation of the adoption of green supply chain management practices in manufacturing sector in Asian emerging economies: Guanxi, antecedents and performance

Abstract

In recent decades, rapid industrial modernization and economic growth have resulted in substantial environmental problems such as air, waste and water pollution in Asian emerging economies (AEE). Green supply chain management (GSCM) has attracted increasing attention from scholars and practitioners as a strategy to reduce negative environmental impacts while achieving economic, operational, social and environmental benefits. As the results of empirical studies on the impact of GSCM practices on firm performance are not conclusive, there is a clear academic need for research to identify whether GSCM practices lead to desirable firm performance, and if so, what the subsequent outcomes are. Therefore, this study first aimed to identify the effect of the adoption of GSCM practices on firm performance. In doing so, a meta-analysis was conducted of 130 effects from 25,680 effect sizes from 50 empirical articles that surveyed 11,127 manufacturing companies. The meta-analysis results indicated that the adoption of GSCM practices led to better performance in four aspects: economic, environmental, operational, and social. Then, this study developed a conceptual framework based on a systematic literature review of 42 papers published between 2005 and 2016. In this framework, the author specifically examined the moderating effect of Guanxi on the relationships between drivers/barriers and the adoption of GSCM practices. In doing so, this study opens a new avenue of research by proposing the roles of Guanxi on the adoption of GSCM practices while accounting for various drivers and barriers. Academic knowledge regarding the adoption of GSCM practices is scarce. Some anecdotal evidence suggested that the adoption of GSCM in this region is partly influenced by Guanxi, a cultural norm which plays a significant role in relationship governance within supply chain activities in the AEE. However, studies on the effects of Guanxi in GSCM are in their infancy, and they simply note Guanxi's importance without detailing how it might influence, positively or otherwise, the adoption of GSCM practices. In addition, the initial academic evidence on supply chain barriers and stakeholders’ drivers inspired this study to take them into account regarding the antecedents for the adoption of GSCM practices within the scope of manufacturing supply chains in the AEE. By drawing on the stakeholder theory and social exchange theory, this study also aimed to investigate the effect of antecedents including stakeholders’ drivers and supply chain barriers on the adoption of GSCM practices as well as the moderating role of Guanxi on the given effects. For doing so, this study used data from 418 manufacturing companies from four major industrial parks in China. There are two reasons for conducting this survey in the manufacturing sector in China. Firstly, China is currently the world's largest and fastest-growing emerging economy and a global production base, exporting a wide variety of merchandise and accounting for 40% of the worldwide manufacturing outputs of different products. Secondly, environmental management has been observed to be a critical factor affecting the prosperity of Chinese manufacturing enterprises. SPSS 20.0 and AMOS 20.0 software were used to analyse the data by using two suitable and effective statistical techniques, namely, covariance-based structural equation modelling (CB-SEM) and hierarchical moderated regression. The findings showed that Guanxi is a significant moderator in reducing the negative impact of high perceived costs and complexity of regulations on the adoption of GSCM practices. Furthermore, the results also indicated that Guanxi reduces the positive relationship between suppliers’ advice and communities’ pressures on the adoption of GSCM practices. In addition, this study extended the body of knowledge on the adoption of green supply chain practices by manufacturing companies in the AEE through the lens of stakeholder theory and social exchange theory. This study contributes to current literature at different levels. First, the meta-analysis conducted in this study has important implications for the research community on sustainability and GSCM in emerging economies. The meta-analysis results indicate that GSCM practices led to better performance in four aspects: economic, environmental, operational, and social. Specifically, the GSCM practice–performance relationship was the strongest for economic performance, followed by operational and environmental performance. Second, in light of the rapidly increasing body of literature on adopting GSCM practices but the scarce literature on Guanxi, this study proposed and empirically tested the effects of Guanxi in enhancing positive drivers and reducing the negative effects of barriers to the adoption of GSCM practices. In this way, this study provided empirical evidence that building Guanxi is essential to ensuring better chances of implementing GSCM practices. In terms of further research, first, based on the meta-analysis conducted in this study, the limited empirical evidences on the relationship between GSCM and social performance indicated that more studies are needed in this domain. Second, given the complexity of this theoretical framework, this study only considered Guanxi as a dyadic between a focal company and its suppliers. Future studies may consider evaluating a focal firm’s comparative Guanxi by measuring the degree of centrality using its network position index. This concept is drawn from the social network theory in which the degree of centrality denotes the level of being at the core of a network by comparing the distance of the position of an individual’s linkage to others in the network at the firm level. Finally, given the similarities among emerging economies, further studies can apply these results in less-explored regions in the AEE such as Korea, Malaysia, and Thailand and emerging economies outside Asia, such as Brazil and Turkey.