A multi-group study of green supplier selection, green supplier development and organizational performance in Chinese manufacturing

Abstract

China is one of the world’s most polluted countries due to its growing manufacturing hub which has created environmental problems. This scenario has changed environmental expectations of government, customers and competitors by forcing companies with different enterprise size, ownership and industry to implement green initiatives in order to increase their economic performance in terms of their environmental impact. Green supplier selection and development are important parts of the green supply chain management concept to overcome negative impacts of the Chinese industrial processes. This study investigated the effects of green supplier selection and green supplier development on organizational performance among Chinese manufacturers in different multi-groups based on enterprise size, ownership and industry. Besides, pressures from government, customers and competitors were investigated as moderators on the relationship between green supplier selection, green supplier development and organizational performance. Research framework and hypotheses were developed based on resource-based view and stakeholder theory. Quantitative analysis was conducted using data collected from 608 manufacturing enterprises in China. Structural equation modeling was used for data analysis. Three major findings were found in the study. Firstly, both green supplier development and green supplier selection had significant and positive effects on organizational performance in terms of operational, environmental and financial performances. Secondly, there were significant differences in both green supplier selection and green supplier development among different enterprise ownership groups and industry groups, but not in different firm size groups. Finally, green supplier selection and green supplier development had stronger effects on organizational performance in cases of greater government involvement and customer participation. Furthermore, the moderating effect of competitive pressure was proven for the relationship between green supplier selection and organizational performance but not for green supplier development. Overall, the findings are useful for Chinese manufacturers to select appropriate green suppliers and develop the desired level of green performance for each supplier.