Role of green innovation and sustainable supply chain management in firm internationalization

Najam Akber Anjum, Zubair Ali Shahid*, Muhammad Shujaat Mubarik, Ummad Mazhar

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

Purpose: Purpose of this study is to explore the nature of relationship between internationalization of firms, sustainability of their supply chains, and the extent of their green innovations. Understanding of the relationship between these constructs is important because of the ever increasing sustainability awareness of consumers in the leading economies of the world. This awareness is now compelling importers of goods from cheap-labor countries to ensure that their suppliers comply with sustainability regulations. This compliance becomes very challenging because of the lack of control on second-tier and third-tier suppliers in a supply chain. First-tier suppliers in this case may drive this effort but need to be motivated enough to do so. In case of environmental sustainability, green innovation (GI) may provide a gradual, and thus more affordable and practical, move toward more eco-friendly ways. As far as the motivation to commit to sustainability and GI is concerned, internationalization and export business expansion may act as one of the most effective motivators for these suppliers. However, the nature of relationship between these three constructs, i.e. internationalization of firms, sustainability of their supply chains and the extent of their GI requires a better understanding.

Design/methodology/approach: The work uses a novel data set collected from 146 medium and large textile firms operating in Pakistan. The partial least square-structural equation modeling approach is used for data analysis.

Findings: All three constructs of internationalization, GI and sustainable supply chain management (SSCM) are significantly associated and thus complement each other.

Originality/value: This work uses a novel agency theory perspective to analyze the relationship between internationalization, GI and SSCM. In that sense, the findings indicate that internationalization could be one of the incentives that can be used by the principals to deal with agents’ goal conflict and information asymmetry.

Original languageEnglish
Pages (from-to)292-310
Number of pages19
JournalReview of International Business and Strategy
Volume34
Issue number2
Early online date9 Jan 2024
DOIs
Publication statusPublished - 20 Mar 2024

Keywords

  • Agency theory
  • Green innovation
  • Internationalization
  • Sustainability
  • Sustainable supply chain management

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management

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