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Being good at being good—The mediating role of an environmental management system in value-creating green supply chain management practices
Jell-Ojobor, Maria
Raha, Aveed
Raha, Aveed
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Abstract
This study adopts a resource-based view to explain the complementary role of the corporate structure in the value creation of green supply chain management (GSCM) practices. Using 8-year panel data collected from 317 US international manufacturers, we analyze the influence of GSCM practices on corporate financial performance (CFP) and the mediating role of a certified environmental management system (EMS) in this relationship. We show that GSCM practices have a positive impact on accounting-based financial performance, meaning, return on assets (ROA) and return on equity (ROE). In contrast, firms that implement GSCM practices and a certified EMS simultaneously achieve a higher market valuation in terms of Tobin's Q in addition to a higher ROA and ROE in the following year. Our study demonstrates that, through their synergistic combination with a firm's complementary EMS, utilizing GSCM practices can result in intangible assets as sources of long-term financial benefits. Our results have several theoretical and managerial implications. They also address the limitations of the prior use of varying survey-based items for internal and external GSCM practices and add nuance to the existing GSCM practices in the literature.
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2022
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Keywords
Corporate financial performance (CFP), Environmental management system (EMS), Greensupply chain management (GSCM) practices, Resource-based theory, Value creation
Citation
Jell-Ojobor, Maria, and Aveed Raha. “Being Good at Being Good—The Mediating Role of an Environmental Management System in Value-Creating Green Supply Chain Management Practices.” Business Strategy and the Environment 31 (5): 1964–84. 2022.