The mediating effect of green innovation on the relationship between green supply chain management and environmental performance in Malaysia manufacturing industries

Abstract

Recently, many manufacturing companies in developed countries have recognised the concept of green supply chain management (GSCM). Additionally, the increasing stakeholders’ pressures from government, customers, suppliers, buyers and the public have forced manufacturing companies to improve their production processes to become more environmental-friendly, and continually seek ways to innovate their products. However, relatively limited research attention has been devoted to the consideration of the relationship between GSCM, green innovation and environmental performance. Therefore, this study aims to bridge this gap by providing empirical evidence to encourage companies to implement GSCM and green innovation to improve their environmental performance significantly. A conceptual model was constructed to link the above-mentioned constructs. Data were collected using a questionnaire-based survey. Through a census method, 123 ISO 14001 certified manufacturing companies in Malaysia were selected. Data were analysed using Partial Least Squares-Structural Equation Modeling (PLS-SEM). Empirical evidence showed that GSCM practices have positive effect on green innovation and environmental performance. Green innovation has been found to have a positive effect on environmental performance and its role as a mediator between GSCM practices and environmental performance has been confirmed. The results confirmed the complementary effect of GSCM practices on green innovation and environmental performance. This research discussed several theoretical and managerial contributions, and extended research in GSCM and green innovation domains. The findings may help managers and practitioners understand how GSCM practices influence green innovation and environmental performance, as well as assist manufacturers in identifying practices that need improvement. Recommendations for future research include the need to test and expand the conceptual model of GSCM and green innovation using longitudinal designs and multiple dimensions of organisational performance instead of environmental performance only.