Green Procurement and Green Supplier Development Antecedents and Effects On Supplier Performance

International Journal of Production Research
ISSN: 0020-7543 (Print) 1366-588X (Online) Journal homepage: http://www.tandfonline.com/loi/tprs20
Green procurement and green supplier

development: antecedents and effects on supplier
performance
Constantin Blome, Daniel Hollos & Antony Paulraj
To cite this article: Constantin Blome, Daniel Hollos & Antony Paulraj (2014) Green procurement
and green supplier development: antecedents and effects on supplier performance, International
Journal of Production Research, 52:1, 32-49, DOI: 10.1080/00207543.2013.825748
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International Journal of Production Research, 2014
Vol. 52, No. 1, 32–49, http://dx.doi.org/10.1080/00207543.2013.825748
Green procurement and green supplier development: antecedents and effects on supplier
performance
Constantin Blomea*, Daniel Hollosb and Antony Paulrajc
a
Louvain School of Management & CORE, Université catholique de Louvain, Louvain-la-Neuve, Belgium; bEBS Business School,
Institute for Supply Chain Management, Wiesbaden, Germany; cDepartment of Entrepreneurship and Relationship Management,
University of Southen Denmark, Kolding, Denmark
(Received 15 May 2013; final version received 4 July 2013)
This study adopts the opposing theoretical views of legitimacy – institutional and strategic – in evaluating firm
performance and top management commitment as antecedents to green procurement and green supplier development.
Additionally, the impact of green procurement and green supplier development on supplier performance is analysed.
Downloaded by [207.241.229.243] at 16:47 02 November 2017
Using a sample of western European companies, we develop a structural equation model to test our hypotheses. We find
that the buying firm’s market performance positively relates to the adoption of green procurement. While financial per-
formance has no effect on green procurement, top management commitment is found to be an important driver of both
green procurement and green supplier development. Moreover, the relationship between green procurement and supplier
performance is fully mediated by green supplier development. The paper addresses a research gap concerning firm-level
antecedents for green procurement and green supplier development showing that both practices may impact supplier
performance. Furthermore, it is shown that legitimacy concerns drive basic green procurement, whereas top management
is decisive for advanced practices, such as green supplier development.
Keywords: green procurement; green supplier development; financial performance; market performance; supplier
performance; structural equation modelling
1. Introduction
An increasing number of companies are rightly recognising corporate responsibility and, in particular, environmental
consciousness as mandatory business imperatives. In fact, rather than being a costly inconvenience, environmental initia-
tives have become a source of competitive parity (Reuter et al. 2010; Hollos, Blome, and Foerstl 2012). Accordingly,
the importance of these environmental aspirations has resulted in elevated importance of green procurement (Meehan
and Bryde 2011). An increasing number of firms are incorporating green procurement into their daily operations across
industries. As evident from the Samsung example, these programmes are also becoming increasingly sophisticated
(Samsung 2010) in that they go beyond basic green procurement initiatives and focus on sophisticated green supplier
development initiatives that aspire to improve supplier capabilities. However, not all firms pursue green supplier
development initiatives to the same extent because these initiatives require more advanced capabilities.
Against this backdrop, we adopt the two opposing theoretical views of legitimacy (institutional and strategic) to
examine the importance of financial performance, market performance and top management commitment in promoting
these proactive cross-boundary initiatives. In other words, we are interested in determining what drives firms to pursue
basic green procurement and the more sophisticated green supplier development. Given that prior research has more
than often considered green procurement and green supplier development as a single construct, we extend our investiga-
tion beyond literature by separating green supplier development initiatives from basic general procurement activities
(Williams 2006). In doing so, we also address the call for more research on the less-investigated phenomenon of green
supplier development (Bai and Sarkis 2010).
In light of growing importance of green procurement and green supplier development, researchers have tried to keep
up with practice by identifying key antecedents that could drive such practices (Pagell, Wu, and Wasserman 2010;
Curkovic and Sroufe 2011). The majority of this research has attributed the adoption of green practices to increasing
stakeholder pressure (e.g. Paulraj 2009). On the contrary, it is also important to investigate the importance of firm-specific
antecedents that could foster green procurement and green supplier development.
*Corresponding author. Email: constantin.blome@uclouvain.be

Ó 2013 Taylor & Francis
International Journal of Production Research 33
To examine the performance impacts of green procurement and green supplier development, we draw upon the
(natural) resource-based view since these initiatives represent a set of socially created, as well as path-dependent,
capabilities that can ultimately result in sustainable competitive advantage. Even though institutional pressures can
lead to the adoption of green practices, it is important that firms develop resources and capabilities that can help
them to respond to these forces and ultimately result in superior performance (Sarkis, Gonzalez-Torre, and Adenso-
Diaz 2010). Accordingly, we believe that it is important to combine (natural) resource-based view along with the
institutional theories to provide greater clarity on the hypothesised relationships. Regarding performance outcome,
we deviate from past research that concentrates on the buying firms’ performance impacts and investigate the
impact of green procurement and green supplier development on supplier performance. This investigation is particu-
larly interesting because performance of the focal firm might be a lagging indicator for performance when one
takes into consideration that suppliers influence focal firm’s performance to an increasing extent due to increased
outsourcing, particularly in manufacturing firms. Thereby, we also examine the particular effect of green supplier
development on the performance of suppliers.
The rest of our paper is structured in four major sections. First, we present a brief synthesis of green procurement
literature and develop the rationale for our research model. In the next section, we summarise the methodology and our
path analytical approach to data analysis and present our results. Subsequently, we discuss the theoretical and practical
implications of our findings, before finally concluding with a summary of the key findings, limitations and suggestions
for further research.
2. Theoretical background
2.1 Green procurement and green supplier development
Due to the growing number of environmental regulations, as well as increased legitimacy pressure from several different
stakeholders, an increasing number of firms are engaging in green practices (Rusinko 2007). Manufacturing and service
firms can reduce the total environmental impact in mainly two ways (Klassen and Vachon 2003): (1) by increasing the
level of investment in environmental technologies and (2) by shifting that investment from pollution control to pollution
prevention. Interestingly, many firms predominantly focus on their own manufacturing processes and distribution net-
works. However, in spite of its widespread recognition, firms have only recently begun to engage in green procurement
that spans the upstream supply chain and have recognised that a concerted effort is necessary to face the sustainability
challenge (Awasthi, Chauhan, and Goyal 2010).
Procurement, a key boundary-spanning function, and the upstream supply partners together influence the environ-
mental impact of the focal firm in several ways: (1) inbound logistics’ environmental pollution, (2) environmental
impact of supplied material, (3) energy consumption and emissions in the production process and (4) eco-efficiency of
the product through its life cycle (Lee and Klassen 2008; Ross and Jayaraman 2009). Literature has used numerous
terms to denote green practices that span the upstream supply chain, be it the entire chain or only the 1st tier suppliers.
Among others, terms such as green procurement, green supply chain management, sustainable procurement/purchasing
and closed-loop supply chain are used to denote green procurement practices. The theoretical definition of green
procurement has been blurred due to its growing demand and constantly changing and innovative nature. Similar to the
traditional research stream on procurement, the notion of these upstream green practices is broadly classified into the
following three categories:
(1) The focal firm adjusts its demand to greener products on the supply side (e.g. design of products for disassembly,
recycling);
(2) The focal firm tries to increase its environmental performance by selecting suppliers delivering greener products
in a greener manner (e.g. waste reduction of supplier, ISO certificates); or
(3) The focal firm works collaboratively with the supplier to improve green performance (e.g. joint planning
activities, supplier development with the help of the focal firm).
Scholars have reflected, to a limited extent, on the differences of these three capabilities. In this study, we
differentiate these categories based on their scope. Categories (1) and (2) are specific to the focal firm and they reflect
procurement-related capabilities that could enhance the performance of the firm. Accordingly, we term categories (1)
and (2) as green procurement. Alternatively, category (3) captures the interaction with, as well as development of, mem-
bers of the supply chain that are outside the procurement organisation. Therefore, this category is significantly different
from the other two in that it reflects inter-organisational capability development that can enhance not only the
34 C. Blome et al.
performance of the focal firm (Carr and Kaynak 2007), but also that of its suppliers (Hartley and Jones 1997). We focus
within instead of on category (3) on the activities aiming to improve green capabilities of suppliers and term them as
green supplier development. In summary, when compared to green procurement that is more firm-specific, green supplier
development has an inter-organisational scope (Vachon and Klassen 2006). Green supplier development interacts with
green procurement insofar that it adds activities with suppliers that encourage and enable green performance, such as (1)
developing instead of terminating suppliers in case of improvable green performance, (2) visiting supplier plants and
helping them to improve environmental performance, (3) timely and frequent communication on green performance
matters and (4) acknowledging green supplier performance, e.g. through awards, and close collaboration with suppliers
on green matters (Krause and Scannell 2002). Green procurement and green supplier development could, thus, serve as
a set of capabilities that are complex, socially created, path-dependent and inimitable. Therefore, following the tenets of
(natural) resource-based view, we believe that they can pave the way for green operations that could ultimately result in
a sustainable competitive advantage for all partners.
2.2 Theoretical grounding

Scholars investigating green procurement and green supply chain management have used institutional theory and the
(natural) resource-based view (NRBV) extensively (please refer to Carter and Easton 2011; Sarkis, Zhu, and Lai 2011
for an overview). While institutional theory provides rationale for why firms adapt green procurement, NRBV explains
how firms can derive competitive advantage from pursuing environmental initiatives.
Institutional theory contends that actions taken by firms are driven by the external pressures they face (Scott 1994).
More specifically, according to the institutional theory, firms adopt these initiatives in order to gain legitimacy or
acceptance within society. Different forms of isomorphic pressures have been identified – namely coercive, normative
and mimetic pressures – which lead to the adoption of similar practices across firms (DiMaggio and Powell 1983).
While Jennings and Zandbergen (1995) were among the first to explain the adoption of practices within the environmen-
tal context, several scholars have subsequently investigated the positive impact of these institutional pressures on green
procurement (Zhu and Sarkis 2007; Zhu et al. 2008; Sarkis, Gonzalez-Torre, and Adenso-Diaz 2010). Accordingly,
our interest is not to further explore these different pressures per se; instead, our ambition is to identify additional
firm-specific variables that can explain why firms pursue green procurement. Specifically, we believe that the variables
that reflect higher visibility of a firm in the market – such as financial and market performance – could serve significant
explanatory factors of adopting green procurement.
The resource-based view of the firm emphasises that valuable, rare, imperfectly imitable and non-substitutable
resources result in competitive advantage (Barney 2001). These resources can consist of assets, capabilities, organi-
sational processes, information, etc. and are classified into tangible and intangible resources. The NRBV extends the
resource-based view by highlighting that the environment might be a constraining factor impacting sustainable com-
petitive advantage and accordingly suggest that firms, which manage the environmental link better than others,
might generate more sustainable competitive advantage (Hart 1995). Nevertheless, given the belief that both mecha-
nisms are not elusive (Hrebiniak and Joyce 1985), we adopt both theories to substantiate our research model.
3. Hypotheses development
3.1 Antecedents of green procurement
Legitimacy implies the existence of a social contract between an organisation and its constituents (or stakeholders).
Though scholars define it with varying degree of specificity, one of the broadly adopted definitions of legitimacy is that
it is ‘a general perception or assumption that the actions of an entity are appropriate within some socially constructed
system of norms, values, beliefs, and definitions’ (Suchman 1995, 574). And, given its unique ability to connect organi-
sational actions to stakeholder expectations, there is a widespread support for the notion that legitimate behaviour can
lead to superior rewards and benefits (e.g. Sonpar, Pazzaglia, and Kornijenko 2010). Legitimacy of organisations has
historically been approached from two opposing theoretical perspectives – institutional and strategic (Oliver 1991; Such-
man 1995). From the institutional perspective, legitimisation is envisioned as a process of institutionalisation, whereby
external norms and beliefs are adopted without much thought (DiMaggio and Powell). On the other hand, the strategic
theoretical perspective envisions legitimacy as instrumental, proactive and, more importantly, a deliberate pursuit that
can ultimately enhance external beliefs, thereby creating newer and enhanced levels of legitimacy (Oliver 1991; Such-
man 1995).
Given its ability to explain organisational initiatives that do not follow the norms of profit maximisation, the legiti-
macy-based view provides a sound theoretical basis for explaining environmentally-oriented initiatives (e.g. Grey,
Kouhy, and Lavers 1995; Nasi et al. 1997). Therefore, we adopt legitimacy theory (Grey, Kouhy, and Lavers 1995;
Suchman 1995) to discuss the effect of our proposed antecedents. Specifically, we utilise the opposing views of legiti-
macy – institutional and strategic – to motivate the hypotheses linking the antecedents to green procurement factors.
Studies relying on the institutional theory suggest that pressures from a firm’s institutional fields will drive it to seek
legitimacy in the eyes of its stakeholders (DiMaggio and Powell 1983; Hart 1995; Suchman 1995). In the words of
Oliver (Oliver 1991, 150), a firm’s response to external institutional pressure ‘emphasises the importance of obtaining
legitimacy for purposes of demonstrating social worthiness’. At the same time, given that institutionalisation highlights
‘organisational scepticism’ when legitimacy-seeking behaviours conflict with other firm objectives, such as profit
maximisation, institutional theory also signals that firms might pursue only basic environmental initiatives that could
sufficiently satisfy stakeholder needs (Oliver 1991, 161).
Following these ideologies within the institutional view of legitimacy, extant research has identified regulatory
compliance, competitive advantage and social concerns as key proponents of corporate environmental initiatives (Winn
1995; Bansal and Roth 2000; Jiang and Bansal 2003). More importantly, organisation theorists contend that the visibility
of an organisation can invite increased institutional pressure to pursue environmentally sound practices (Henriques and
Sadorsky 1999; Bowen 2000; Tate, Ellram, and Kirchoff 2010). Organisational visibility suggests that an organisation is
‘publicly recognised’, and hence more closely scrutinised by external stakeholders – customers, media, environmentalists
as well as government agencies – when it comes to environmental issues (March and Simon 1958). Accordingly, visible
organisations will have to consciously respond to stakeholder demand to maintain their reputation and legitimacy
(DiMaggio and Powell 1983; Oliver 1991; Bowen 2000).
Extant research focusing on organisational visibility have, for the most part, used firm size as a proxy and studied
its impact on environmental responses (e.g. Bowen 1999; Henriques and Sadorsky 1999). On the other hand, market
performance – measured through reputation, image and market share position – could also enhance the visibility of
organisations significantly (Delmas and Toffel 2004). Therefore, following the tenets of the institutional view of legiti-
macy (DiMaggio and Powell 1983; Oliver 1991; Suchman 1995), we propose that superior market performance could
serve as a significant ‘institutional’ trigger for environmental responses within and across organisations. At the same
time, we also contend that though such institutional pressures can lead to green procurement initiatives, they need not
promote the need for deeper ‘environmentally-oriented’ activities with suppliers. Accordingly, following the notion of
‘organisational scepticism’, we hypothesise that superior market performance will only promote basic supply-side envi-
ronmental initiatives, such as green procurement.
H1: Market performance is positively related to green procurement.
Scholars also suggest that superior financial performance of firms can increase their visibility among external
stakeholders. Additionally, superior financial performance is also considered as a source of organisational slack in the
form of excess resources (Bowen 2000; Sharma 2000). Accordingly, superior financial performance could lead to
visibility, thereby leading to more pressure from external constituents. External stakeholders could also perceive firms
with superior financial performance to be in a position to use the excess discretionary slack resources to overcome the
risk and unpredictability in adopting supply-side environmental practices (Bourgeois III 1981; Russo and Fouts 1997;
Menguc, Auh, and Ozanne 2010). Accordingly, following organisational scholars espousing the institutional view of
legitimacy (e.g. DiMaggio and Powell 1983; Sharma 2000), we propose that superior financial performance will
promote basic supply-side environmental initiatives, such as green procurement (Shittu and Bake 2010). Additionally,
investments in development initiatives are far more uncertain than basic green procurement investments. Therefore, firms
should exercise scepticism when allocating their limited resources to such advanced initiatives and rather invest in basic
green procurement initiatives that would sufficiently satisfy the needs of their external stakeholders (Shittu and Bake
2010). The above discussion forms the basis of the following hypotheses:
H2: Financial performance is positively related to green procurement.
Organisational scholars argue that examining legitimacy from the institutional perspective alone is not sufficient in
explaining organisational behaviour (Kraatz and Zajac 1996; D’Aunno, Succi, and Alexander 2000). The diagonally
opposing view is that legitimacy can be managed from a strategic perspective as well (Oliver 1991; Suchman 1995).
The strategic perspective of legitimacy ‘emphasises ways in which organisations instrumentally manipulate and deploy
evocative symbols in order to garner societal support’ (Suchman 1995, 572). In contrast to an institutional approach, a
36 C. Blome et al.
strategic approach depends on managerial choice (Sonpar, Pazzaglia, and Kornijenko 2010). Therefore, we forward top
management environmental commitment as a strategic driver in promoting supply-side green practices (Sharma 2000;
Menguc, Auh, and Ozanne 2010). A proactive top managerial discretion could directly affect the nature and scope of
organisational environmental practices (Hambrick and Mason 1984; Drumwright 1994; Child 1997; Menon and Menon
1997; Preston, Chen, and Leidner 2008). Top management is also in a unique position to energise the organisation by
(1) communicating the importance of environmental prowess, (2) creating and maintaining green values, (3) initiating
environmental programmes and policies and (4) rewarding superior environmental performance (Berry and Rondinelli
1998; Modi and Mabert 2007; Lindgreen, Swaen, and Johnston 2009). By devoting more attention and resources to pro-
active environmental initiatives, top management can also clearly signal their strategic importance. Accordingly, given
that supply-side green initiatives could lead to superior economic as well as environmental performance, we believe that
the strategic view of legitimacy can provide the theoretical basis for the positive relationship between top management
commitment and green procurement. Therefore,
H3a: Top management commitment is positively related to green procurement.
In addition to promoting basic initiatives, managerial choice, as espoused by the strategic view of legitimacy, can
also encourage proactive as well as norm-breaking initiatives (Beer 2003). The underlying logic is that the strategic
approach departs from the institutional approach in seeing legitimacy as an intentional pursuit wherein managers are
ascribed a higher degree of latitude to initiate proactive actions that could promulgate novel levels of legitimacy
(Dowling and Pfeffer 1975; Elsbach 1994). Strategic managerial choice can, thus, allow for pro-action in addition to
re-action and enable supply-side environmental development initiatives that are often risky, costly, burdensome as well
as long-term oriented (Child 1997; Krause and Ellram 1997). More specifically, top management commitment can not
only indicate an organisational mandate to strive for environmental superiority, but can also facilitate ‘issue legitima-
tion’, whereby the organisational identity is positively altered towards green practices (Sharma, Pablo, and Vredenburg
1999, 102). Such an attitudinal change could eventually facilitate a complete makeover of organisation-wide green
policies, activities, routines, structures as well as goals (Coddington 1993; Hart 1995; Menguc, Auh, and Ozanne 2010).
From the strategic perspective of legitimacy, top management commitment could also be envisioned to play a critical
role in enabling supply-side green initiatives, given their ability to provide access to resources, competencies and
knowledge, ultimately creating new norms of legitimacy. Accordingly, the strategic perspective of legitimacy provides
convincing support to the relationship between top management commitment and green supplier development. Thus,
H3b: Top management commitment is positively related to green supplier development.
3.2 Green procurement and supplier performance

In addition to its daily procurement activities, green procurement also entails a company’s commitment to environmental
responsibility (Carter and Jennings 2001). Though earlier studies express doubt that green measures could pay-off from
an economic perspective (Porter and van der Linde 1995; Carter, Kale, and Grimm 2000) more recent studies suggest
that they could result in improved performance (Melnyk, Sroufe, and Calantone 2003; Pullman, Maloni, and Carter
2009). For example, costs can be lowered as a result of decreased accidental environmental releases and reduced mate-
rial waste (Klassen and McLaughlin 1996; Carter, Kale, and Grimm 2000). Chen (2005) proposes that the incorporation
of green procurement is an effective tool in controlling and preventing pollution, and therefore could ultimately lead to
the attainment of environmental and economic performance. Increased importance of green activities may also improve
quality through the more careful use of resources and respect for longer product life spans (Fiksel 1997). According to
the resource-based view, the ability to manage green transactions with suppliers is indeed complex and accumulated
over a period of time. Additionally, it can be seen as an inter-organisational routine that is deeply embedded and diffi-
cult to imitate (Hart 1995). Therefore, in spite of its dominant focus on operational and market benefits, green procure-
ment can be envisioned as a path-dependent capability that can have a profound effect on competitive advantage of
firms. However, these effects are not only limited to the buying firm’s performance. In fact, suppliers’ performance
could also increase through the properly designed environmental standards which can not only trigger innovation, but
also result in lowered total costs and higher product value as well as efficiency (Porter and van der Linde 1995). Addi-
tionally, supplier performance facets like product quality, lead time and supply security would also improve through
such practices (Carter 2005). Therefore, we hypothesise the following:
H4a: Green procurement is positively related to supplier performance.
Supplier management, which focuses on the overall interaction with suppliers, has increasingly become an integral
part of strategic procurement (Tangpong, Michalisin, and Melcher 2008) since buying firms focus more on their core
competencies and commit more to their suppliers (Krause 1997; Krause, Scannell, and Calantone 2000; Narasimhan and
Das 2001). It is no longer sufficient to just search for green suppliers and buy existing green products. Instead, it is
necessary to include environmental collaboration, and in particular development, which improves various supplier
capabilities within the domain of a firm’s practices to meet the increasing challenges (Watts and Hahn 1993; De Burgos
and Cespedes Lorenete 2001). Accordingly, the adoption of green procurement should eventually evolve into supply-
side development activities. Although the scope of green procurement and green supplier development is different in
that development activities capture interaction with suppliers outside the procurement department and are a considerable
extra effort (Krause and Ellram 1997; Sako 2004; Vachon and Klassen 2006), green supplier development should
significantly be influenced by green procurement as it helps to create the much-required rapport with suppliers (Agarwal
and Selen 2009; Wagner and Krause 2009). This is particularly necessary as companies increasingly rely on suppliers’
green performance (Narasimhan and Carter 1998), and managers successively realise that advanced environmental
stewardship is required rather than pure environmental compliance (Handfield, Sroufe, and Walton 2005). More
importantly, green procurement initiatives will help firms to identify suppliers that would be likely candidates for green
supplier development. Accordingly, green procurement initiatives could be seen as a precursor to advanced green
development with the supply partners.
H4b: Green procurement is positively related to green supplier development.
Green supplier development increases the cooperation with the suppliers through support and feedback mechanisms
that jointly improve supplier performance (Handfield et al. 1997; Krause, Handfield, and Scannell 1998). Moreover, it
also helps supply partners to work together in making supply-side ecological improvements (Krause 1999; Humphreys,
Li, and Chan 2004). Lusch and Brown (1996) suggest that when firms jointly try to solve their common problems and
attempt to improve the relationship as a whole, they will be able to achieve superior performance benefits. Accordingly,
developing actions can ultimately facilitate the formation of idiosyncratic interaction routines that can enable the
understanding of strengths and weaknesses of the supply partners (Narasimhan and Das 2001; Ross et al. 2009). Such
an increased understanding of green strengths and weaknesses of the supply partner can enable firms to better
accommodate the ever-changing needs of supply-side environmental prowess on a very short notice (Foerstl et al.
2010). Additionally, inter-organisational developing behaviour can dramatically reinforce suppliers’ trust in the buying
firm (Johnston et al. 2004; Sako 2004), and norms like trust could in turn work as complements to enhance performance
(Williams 2006). Green supplier development can, thus, result in establishing deeply embedded capabilities that are tacit,
relationship-specific and not easily replicated by competition (Chen, Paulraj, and Lado 2004). Hence, following the
tenets of the resource-based view that propose long-term competitive advantage to be directly related to the ability of
firms to create strategic resources and capabilities that are hard to imitate, green supplier development could be
envisioned to result in significant competitive advantages to not only the buyer firm, but also the supplier firm. Based
on the above discussions, we forward the following hypotheses for testing.
H5: Green supplier development is positively related to supplier performanc.
As discussed above, recent studies find evidence that cost should decrease with green procurement, and therefore
increase buyer performance (e.g. Carter, Kale, and Grimm 2000; Melnyk, Sroufe, and Calantone 2003) as well as
supplier performance (e.g. Porter and van der Linde 1995; Carter 2005). But, given that green procurement is aligned
more with the needs of the focal firm, when it comes to strategic performance measures, such as innovation and
responsiveness, it would be safe to assume that green procurement initiatives will be, to a larger extent, beneficial to the
focal firm than the supplier firm. However, as suggested by our prior hypotheses (H4b and H5), we propose that green
supplier development can have a significant mediating effect on the relationship between green procurement and
supplier performance. Theoretically, this mediating effect is informed by the resource-based view and its theoretical
extensions (Hart 1995; Dyer and Singh 1998; Lavie 2006). In line with these views, inter-firm development will enable
firms to acquire relational resources and capabilities that can help advance their proactive green aspirations (Hart 1995;
Lorenzoni and Lipparini 1999; Paulraj 2011). Specifically, green supplier development can not only enable the
synergetic combinations of resources and capabilities between the supply chain partners, but also help firms to leverage
such inter-firm resources/capabilities to create inter-organisational endowments that are more valuable, rare and difficult
38 C. Blome et al.
to imitate (Dyer and Singh 1998). The effect of green procurement on supplier performance can, thus, be substantially
transformed by green supplier development as it can help in the formation of inter-organisational exchange routines and
complementary endowments that can further improve (1) the inherent capabilities within the partner firms and (2) the
long-term strategic performance of both the partners (Dyer and Singh 1998; Lavie 2006; Sarkis, Gonzalez-Torre, and
Adenso-Diaz 2010). Accordingly, we hypothesise that the relationships between green procurement and supplier perfor-
mance will be positively mediated by green supplier development. Therefore,
H6: Green supplier development mediates the relationship between green procurement and supplier performance.
4. Methodology
4.1 Data collection
The survey instrument included factors relating to firm-specific as well as relationship-specific constructs. Accordingly,
individuals that occupy strategic positions within the procurement department were considered to be more knowledge-
able about the strategic aspects of the firm as well as its inter-organisational relationships. Therefore, we sought
responses to the questionnaire from ‘key informants’, including senior executives of procurement. The target sample
frame consisted of western European firms. We included services as well as manufacturing firms to gain additional
insights into the sector of services and its growing impact on the economy and the environment. Our sample was
derived from a randomly selected sub-sample of the address database of one of the leading European consulting firms
in the supply chain and procurement arena (approx. 3500 firms).
Prior to data collection, the survey instrument was pre-tested to assess the face and content validity of the scales and
the adequacy of the research design. In a pre-test workshop with 15 senior procurement professionals, we assessed the
content and clarity of the items, resulting in minor changes of the wording of some items. More importantly, we chan-
ged one item in the green procurement construct since the suggested item ‘use of life cycle assessments’ (Carter and
Jennings 2001) had limited relevance for service firms. Instead, we included an item reflecting the low energy consump-
tion of suppliers. In the final instrument, the indicators, except for control variables, were measured using a seven-point
Likert scale.
The questionnaire was initially sent to a sample of 476 companies. In order to increase the response rate, we fol-
lowed a modified version of Dillman’s total design method (Dillman 1978). Respondents had the choice to return the
questionnaire through various means, such as online, direct mail, fax or email. Four weeks after the initial mailing, per-
sonalised reminder emails were sent to all potential respondents. The firms that did not respond within another six
weeks were contacted by telephone in a last wave and were provided an email with the questionnaire. We received 114
responses, an effective response rate of 24.0%. This response rate is comparable to other research within the fields of
procurement (e.g. Narasimhan and Das 2001; Chen and Paulraj 2004). The overview of the final sample is presented in
Table 1.
4.2 Measures
Theoretical constructs were adopted from previously established and tested scales (please refer to Table 2). Market
performance measures a firm’s prosperity from a commercial perspective, using key indicators as outlined by
González-Benito (2007). Financial performance captures a firm’s financial success using four key indicators, as defined
by Carr and Pearson (1999) and Chen and Paulraj (2004). Top management commitment reflects the support, leadership
and commitment of a company’s leadership team to their supply chain activities (Carter and Jennings 2004). Green
Table 1. Sample overview.
Sector SIC code n Percentage Annual revenues [Euro] n Percentage
Manufacturing 20–39 70 61.4% <50 million 11 9.6%

Transportation, communications, electric, 40–49 20 17.5% 50–1000 million 23 20.2%
gas and sanitary services
Others 14 12.3% 1,000–10,000 million 35 30.7%
Non-disclosed industry 10 8.8% >10,000 million 40 35.1%
Non disclosed revenues 5 4.4%
Table 2. Means, standard deviations, standardised loadings, Cronbach’s α, CR values and AVE of the measurement model.
Indicators Source Mean Std.Dev. Loadinga
Market performance (CA = 0.833; CR = 0.884; AVE = 0.657)b

Customer satisfaction González-Benito (2007) 5.08 0.987 0.868
Market share(of main product) González-Benito (2007) 4.87 1.105 0.771
Reputation and image González-Benito (2007) 5.15 1.123 0.853
Success of new product launches González-Benito (2007) 4.78 1.011 0.743
Financial performance (CA = 0.946; CR = 0.947; AVE = 0.857)

Firm’s net income before tax (EBIT) Carr and Pearson (1999), Chen and Paulraj (2004) 4.73 1.073 0.988
Profit as a percentage of sales Carr and Pearson (1999), Chen and Paulraj (2004) 4.69 1.024 0.906
Return on investment (ROI) Carr and Pearson (1999), Chen and Paulraj (2004) 4.70 0.995 0.880
Top management commitment (CA = 0.868; CR = 0.920; AVE = 0.792)

The involvement of our purchasing department in responsible purchasing …
… has been motivated by the example of Carter and Jennings (2004) 4.78 1.348 0.890
senior management.
… has been motivated by top down Carter and Jennings (2004) 4.76 1.371 0.919
initiatives.
Our involvement in green purchasing has Carter and Jennings (2004) 4.77 1.584 0.860
been driven by top-down initiatives.
Green procurement (CA = 0.852; CR = 0.894; AVE = 0.627)

Our purchasing department participates in the Carter (2005), Carter and Jennings (2004) 3.71 1.648 0.810
design of products for disassembly
Our purchasing department participates in the Carter (2005), Carter and Jennings (2004) 3.79 1.634 0.814
design of products for recycling or reuse
Our purchasing department actively Carter (2005), Carter and Jennings (2004) 4.59 1.713 0.774
contributes to the reduction of packaging
material
Our purchasing department seeks suppliers Adapted from Carter and Jennings (2004) 4.16 1.515 0.783
with low energy consumption
Our purchasing department asks suppliers to Carter (2005), Carter and Jennings (2004) 4.25 1.656 0.778
commit to waste reduction goals
Green supplier development (CA = 0.798; CR = 0.869; AVE = 0.625)

Our purchasing department …
… communicates timely and frequently with Krause (1999), Humphreys, Li, and Chan 2004 4.03 1.605 0.863
its suppliers concerning sustainability
related issues
… engages in close cooperation for the Chen and Paulraj 2004 3.82 1.732 0.827
greening of our supply chain with a limited
number of suppliers
… rather develops than abandons suppliers if Based on Humphreys, Li, and Chan (2004) 4.39 1.466 0.760
they do not meet our environmental
standards
… conducts visits at supplier premises to help Krause (1999), Humphreys, Li, and Chan (2004) 4.45 1.592 0.702
them improve their sustainable practices
… provides suppliers with capital for new Krause (1999), Humphreys, Li, and Chan (2004)
investments in green technology⁄
… acknowledges suppliers’ ecological Krause (1999), Humphreys, Li, and Chan (2004)
performance through awards⁄
Supplier performance (CA = 0.892; CR = 0.918; AVE = 0.652)

Innovativeness New item 4.28 1.336 0.812
Lead time González-Benito (2007), Panayides and Lun (2009) 3.51 1.254 0.814
Material and service costs González-Benito (2007),Panayides and Lun (2009) 3.58 1.427 0.657
Quality and service González-Benito (2007), Panayides and Lun (2009) 4.20 1.390 0.874
Responsiveness González-Benito (2007), Panayides and Lun (2009) 3.98 1.387 0.853
Security New item 4.00 1.379 0.815
a
All standardised loadings are significant at p < 0.01.
CA= Cronbach’s α; CR = compositive reliability; AVE = average variance extracted.
b
⁄
Deleted due to low loading.
40 C. Blome et al.
procurement displays the environmentally friendly activities in an organisation’s procurement process and reflects its
commitment to environmental responsibility. The indicators relating to this construct were adopted directly from past
studies. In case of green supplier development, we identified existing and appropriate scales based on an extensive
literature review and designed a reflective measure. The items were drawn from the supplier development (Krause 1999;
Humphreys, Li, and Chan 2004) and cooperative buyer supplier management (Vachon and Klassen 2008) literature and
further adapted to reflect an environmental context. Specifically, the indicators capture the firm’s development activities,
such as joint collaboration on environmental matters, acknowledging suppliers’ green performance or helping suppliers
to improve their environmental performance. The construct is modelled after Krause’s definition of supplier development
where supplier development is ‘… any effort by a buying firm to improve a supplier’s performance and/or capabilities
to meet the buying firm’s short- and/or long-term supply needs’ (Krause 1999, 206). Finally, supplier performance
displays the suppliers’ improvement in key performance indicators for the buying firm. The indicators were adopted
from Gonzalez-Benito (2007)’s procurement strategic objectives and Panayides and Lun (2009)’s supply chain
performance. Given the elevated importance of supplier innovation and supply risks is recent literature (Azadegan and
Dooley 2010), we also include innovation and security as indicators of supplier performance.
4.3 Non-response bias

Although the response rate was sufficiently high, we rigorously assessed the existence of any non-response bias. First,
following the Armstrong and Overton (1977)’s test, we compared early and late responses. We split the final sample into
two groups based on the dates the responses were received. More specifically, the responses received before our last wave
of telephone calls were grouped as early respondents (n = 70). The responses received after this point in time were
grouped as late respondents (n = 44). This analysis included the demographic variables (firm size) as well as one
randomly selected indicator per construct. The Mann–Whitney U-tests performed on the two groups yielded no
statistically significant differences (at p < 0.05). Furthermore, we compared the type of firms (i.e. major and current
clients). Our analysis did not reveal any significant differences between these groups. Finally, we contacted some of the
non-responding firms to record the reason for not participating in the study. Most of the firms declined to participate in
the study due to the fact that (1) they did not have enough time to complete the survey or (2) the firm had a general rule
not to respond to surveys due to the increasing number of survey requests.
4.4 Common method variance

Given that the data for predictor and outcome variables were collected from the same respondents, we conducted methodo-
logical tests to ensure that common method bias is not an issue (Podsakoff et al. 2003). More specifically, we employed
exploratory factor analysis to test for common method bias (Harman 1967). The assessment revealed five factors with eigen
values greater than 1.0 that accounted for 68.1% of the variance, and the first factor accounted for only 15.9% of the vari-
ance. Given that a single factor did not emerge and the first factor did not account for majority of the variance, common
method variance might not be an issue. This result was further validated using the measurement analysis recommended by
Podsakoff et al. (2003). According to this procedure, a methods factor was included along with six theoretical constructs.
First, the methods factor did not affect the path loadings or statistical significance of the path between the indicators and
their respective construct. Second, in comparison to the average variance of 0.73 explained by the substantive factors, the
average variance explained by the methods factor was only 0.19. These results collectively suggest that common method
bias was not a serious problem and did not affect the path analysis among the six constructs.
4.5 Data analysis and results

We used the partial least squares (PLS) approach using SmartPLS 2.0 to simultaneously assess the measurement
instrument and the hypothesised model. This approach was considered appropriate for two reasons: (1) PLS delivers
valid results even for small sample sizes. (2) The estimates of the individual path coefficients are more conservative than
in covariance-based techniques (Chin 1998). Another reason for using PLS is the non-normality of data (Chin 1998).
This was not valid in our case since the multivariate normality, which was tested using the Mardia’s coefficient, shows
that the data is normally distributed. The value (1.14) is within the recommended values of 1.96 and 1.96.
Particularly, PLS was deemed appropriate, given our sample size. Nonetheless, our sample size is still within the
recommended range based on the heuristic (e.g. sample size minimum of 10 times the number of maximum items per
construct or 10 times the total number of used constructs). However, we pursued a post hoc analysis of statistical power
as recommended by Peng and Lai (2012). We assessed all paths in the research model as well as the largest structural
equation. In our case, the largest structural equation was for green procurement, which had three independent variables
affecting it. In order to have sufficient statistical power (Cohen 1988, 56), the research model should have a statistical
power of at least 0.80, meaning that there is 80% chance that a relationship really exists, i.e. the probability of rejecting
H0 when H1 is true. The analysis revealed that statistical power of the structural equations ranged between 0.856 and
0.999, showing that the sample size is sufficiently large for the presented model since effect sizes are sufficiently large.
Small sample sizes are often considered as unreliable. However, the size of the sample is included in the calculation of
the t-values in PLS. Therefore, high t-values with smaller sample sizes are even more meaningful than those with large
sample sizes. As PLS does not work with an overall model fit index, we relied on sufficiently high R2 values, f 2 effect
size, predictive relevance (Q2, cross-validated redundancy also known as Stone–Geisser criterion), construct reliability
and significant path coefficients to demonstrate the meaningfulness of our model (Chin 1998).
4.5.1 Validity and reliability

The descriptive statistics, item loadings, Cronbach’s α, composite reliability (CR) and average variance extracted (AVE)
for the constructs are presented in Table 2. The inter-correlations on indicator level as well as construct level in the lat-
ter case, along with the square-root of AVE, are presented in Tables 3 and 4.
Reliability was assessed using (1) internal consistency method estimated by Cronbach’s α (Nunnaly 1978) and (2)
CR. The Cronbach’s α values range from 0.798 to 0.946, above the required minimum of 0.7. The CR values, ranging
from 0.869 to 0.947, exceed the suggested minimum of 0.7. This result establishes the reliability of the theoretical con-
structs. Convergent validity and uni-dimensionality of the constructs were established using the item loadings and their
significance. All items have statistically significant standardised loadings with their underlying constructs in a simulta-
neous estimation of the measurement and structural PLS models. However, the loadings of three items were below the
threshold of 0.70. We removed two of the items in green supplier development with the lowest loading from our analy-
sis (see Table 2), but kept the ‘cost’ item owing to its theoretical importance in spite of the slightly lower loading. The
CR and AVE values exceeded the threshold of 0.70 and 0.50, respectively (Chin 1998). This also warranted retaining
the indicators within supplier performance. All tests of discriminant validity were similarly supportive. The square root
of the AVE of a latent construct is greater than its correlation with all other variables (Fornell and Larcker 1981). In
Table 3. Cross loadings of indicators.
Indicators MP FP TMC GP GSD SP
MP1 0.868 0.319 0.180 0.300 0.129 0.111

MP2 0.771 0.419 0.079 0.186 0.102 0.047
MP3 0.853 0.466 0.143 0.316 0.125 0.068
MP4 0.743 0.417 0.218 0.150 0.177 0.149
FP1 0.470 0.988 0.064 0.066 0.004 0.004
FP2 0.489 0.906 0.055 0.025 0.001 0.001
FP3 0.520 0.880 0.072 0.003 0.023 0.043
TMC1 0.290 0.009 0.890 0.440 0.577 0.320
TMC2 0.175 0.008 0.919 0.421 0.560 0.313
TMC3 0.029 0.170 0.861 0.452 0.539 0.263
GP1 0.280 0.020 0.300 0.810 0.431 0.383
GP2 0.277 0.038 0.360 0.814 0.572 0.355
GP3 0.360 0.002 0.290 0.774 0.355 0.304
GP4 0.163 0.156 0.539 0.783 0.622 0.430
GP5 0.207 0.018 0.401 0.778 0.523 0.371
GSD1 0.239 0.029 0.522 0.598 0.863 0.334
GSD2 0.078 0.121 0.491 0.587 0.827 0.529
GSD3 0.063 0.038 0.505 0.398 0.760 0.372
GSD4 0.321 0.138 0.474 0.441 0.702 0.331
SP1 0.140 0.033 0.301 0.443 0.432 0.812
SP2 0.076 0.071 0.269 0.382 0.441 0.815
SP3 0.052 0.028 0.219 0.273 0.301 0.657
SP4 0.001 0.036 0.293 0.421 0.443 0.874
SP5 0.123 0.056 0.252 0.434 0.410 0.853
SP6 0.013 0.036 0.290 0.289 0.383 0.815
Note: Bold values show the highest loading of each item for the respective constructs.
42 C. Blome et al.
Table 4. Correlations of constructs.
Factors MP FP TMC GP GSD SP

a
Market performance (MP) 0.81
Financial performance (FP) 0.49b 0.93
Top management commitment (TMC) 0.19 0.06 0.89
Green procurement (GP) 0.32 0.06 0.49 0.79
Green supplier development (GSD) 0.16 0.00 0.63 0.65 0.79
Supplier performance (SP) 0.03 0.00 0.34 0.47 0.50 0.81
a
The square root of the construct’s AVE is provided along the diagonal (in bold).
b
Off-diagonal numbers are the Pearson correlation between the constructs.
addition, we confirmed this finding by comparing the cross-loadings of the items (see Table 3). As evident in this table,
the loading of an indicator is highest for the construct it measured. These results collectively show that our constructs
are reliable as well as valid.
To receive the T-values for the significance levels of our hypotheses, we used the bootstrapping algorithm. Henseler
and Fassott (2010) recommend a minimum of 500 samples or data-sets to decrease the effects of possible random sam-
pling errors. We used 2000 data-sets; adding additional data-sets made a marginal difference to the solution. We also
used data-sets of 1000 and 1500 to ensure that our results are robust.
4.5.2 Hypotheses testing

The empirical results for the structural model depicted in Figure 1 are shown in Table 5. This model accounted for 32%
of the variance in green procurement; 55% of the variance in green supplier development; and 29% of the variance in
supplier performance. H1, linking market performance to green procurement, was significant (b = 0.33; t = 3.607;
p < 0.001). In case of financial performance, H2, linking financial performance to green procurement (b = 0.20;
t = 1.926; ns), was not statistically significant. The paths leading from top management commitment to: (1) green pro-
curement (b = 0.42; t = 5.084; p < 0.001); and (2) green supplier development (b = 0.41; t = 4.995; p < 0.001) were statisti-
cally significant, providing support for hypotheses H3a and H3b. Among the hypotheses testing the effects of green
procurement, H4a, linking green procurement to supplier performance (b = 0.25; t = 2.294; p < 0.05), and H4b, linking
green procurement to green supplier development, were significant (b = 0.45; t = 5.318; p < 0.001). The path leading from
green supplier development to supplier performance (b = 0.34; t = 2.588; p < 0.01) was statistically significant, providing
support for hypotheses H5.
The mediating effect of green supplier development was tested using the Sobel test (Sobel 1982). This approach
involved the testing of two different models focusing on the relationship of the predictor (green procurement), the medi-
ator (green supplier development) and the dependent variable (supplier performance). The first model included the path
between green procurement and green supplier development. In addition to the paths in Model 1, the second model
Market
Performance
H1
Green
Procurement
H2 H4a
Financial H4b Supplier

Performance H3a Performance
H6
H5
Green Supplier
Development
H3b
Top Management
Commitment
Figure 1. Research model.

Table 5. Empirical results of the research model.
Hypotheses Path coefficient t-value Result

⁄⁄⁄
H1: Market performance → green procurement (+) 0.33 3.607 Supported
H2: Financial performance → green procurement (+) 0.20ns 1.926 Not supported
H3a: Top management commitment → green procurement (+) 0.42⁄⁄⁄ 5.084 Supported
H3b: Top management commitment → green supplier development (+) 0.41⁄⁄⁄ 4.995 Supported
H4a: Green procurement → supplier performance (+) 0.25⁄ 2.294 Supported
H4b: Green procurement → green supplier development (+) 0.45⁄⁄⁄ 5.318 Supported
H5: Green supplier development → supplier performance (+) 0.34⁄⁄ 2.588 Supported
Variance explained of endogenous variable R2

Green procurement 0.321
Green supplier development 0.546
Supplier performance 0.289
ns
not significant.
⁄
p < 0.05.⁄⁄p < 0.01.⁄⁄⁄p < 0.001.
included the paths from the predictor and the mediator to supplier performance. The Sobel test analyses the relationship
of the unstandardised beta and its standard error in Model 1, representing the path from predictor and mediator, and the
unstandardised betas and their standard errors in Model 2, representing the paths from predictor to mediator, mediator to
dependent variable and predictor to dependent variable. The Sobel test, thus, allows for calculating whether the media-
tion effect is significant. The Sobel test statistic for the mediating effect of green supplier development (2.351; p < 0.05)
shows that green supplier development significantly mediates the relationship between green procurement and supplier
performance. This result also provides strong support for hypothesis H6.
Since H4a was statistically significant, it is not necessary to pursue any additional test to detect whether the media-
tion effect is partial or complete mediation. The path of green procurement on supplier performance is still significant.
Thus, the relationship between green procurement and supplier performance is partially mediated by green supplier
development.
5. Discussion and managerial implications

As for antecedents, we studied the influence of market performance and financial performance – as proxies of legitimacy
requirements – on green procurement. We also studied the effect of top management commitment on both green pro-
curement and green supplier development. In our case, market performance was found to have a significant positive
influence on green procurement; financial performance was not persuasive in promoting green procurement. In other
words, visibility, as espoused by the institutional view, was found to be impacted only by market performance. To prac-
titioners, this result suggests that the market performance of firms will increase their visibility, thereby increasing pres-
sure on their firm to pursue green procurement initiatives. Our results also suggest that the often-heard argument that
only firms with superior financial performance engage in green procurement initiatives is inconclusive. Specifically, this
finding is in contrast to Waddock and Graves (1997), who found a positive impact of financial performance on corporate
social performance, which included environmental measures, such as pollution control and other environmental strate-
gies. Moreover, it is in contrast to Wahba (2008), who investigated the moderating effect of financial performance and
concluded that good financial performance has positive effects on corporate environmental performance.
We pose two different explanations for the non-significance of this hypothesised effect. First, it seems that financial
performance represents a different set of institutional pressures. For example, this could be explained by the fact that
firms in industries with high profitability, such as pharmaceutical, military and petrochemicals, face less direct pressure
from certain pressure groups, such as the end customer, and instead face more pressure from groups (shareholders) that
are more interested in the financial performance of the firm rather than if the firm pursues green procurement or not.
This situation might also be fuelled by the contradiction of myopic vs. long-term effects since green measures will pay-
off only in the mid-term or long-term. Second, it seems that even though firms have financial slack, it does not mean
that the firm will invest its resources in green procurement even though other firms might pursue it. This result demon-
strates that even though competitive pressure might be present, legitimacy concerns are prevalent only in the case of
firms that have high market performance instead of firms that have high financial performance.
On the other hand, we found significant evidence that top management commitment is an important antecedent to
both green procurement and green supplier development. This result, in conjunction with the insignificant effect of
44 C. Blome et al.
financial performance on green procurement, suggests that institutional forces of legitimacy are not ‘iron cages’ (DiMag-
gio and Powell 1983) and top management plays a major role. Organisations need not blindly adopt proactive green
supplier development initiatives just to conform to legitimacy expectations. However, top management decisions are the
major driving force for pursuing advanced green initiatives, whereas institutional drivers just promote basic initiatives.
An environmentally-oriented procurement strategy not only minimises the environmental impact of products of
the focal firm (which is not focus of this paper), but it could also help in identifying, as well as exploiting, green
competencies available in the supply chain. The result for hypothesis H4b supports this notion by clearly showing that
truly internalised and environmentally-conscious procurement is highly beneficial for green supplier development.
Well-defined processes and knowledge on the reduction of waste and packaging materials, and the consideration of
well-designed disposable products, could eventually transfer into developing practices that fall outside the core of
procurement activities. Among others, these green development initiatives could focus on jointly working with suppliers,
supporting them, providing knowledge, regularly communicating with each other on environmental performance, but
also acknowledging good environmental performance. Resources, knowledge and insights that are exchanged during
such cooperation could greatly improve suppliers’ overall performance. More importantly, joint efforts that focus on
improving suppliers’ environmental performance can eventually augment their economic performance.
Following supply chain scholars that espouse the importance of supply chain initiatives in achieving superior
environmental and economic performance of a firm, green procurement and green supplier development were also
envisioned to result in superior supplier performance. The insignificance of the relationship between green procurement
and supplier performance in addition to the significance of the mediation effect suggests that the overall and positive
impact of green procurement on supplier performance is fully mediated by green supplier development. In other words,
supplier performance will be improved by environmentally-conscious procurement if the buying firms seriously try to
improve suppliers’ environmental capabilities. The mere strategy of solely buying green products will not help. The
knowledge transfer from the buyer to the supplier is critical and a trustful sign that green performance is taken seriously.
Moreover, finding a significant link between green supplier development and supplier performance (H5) provides empiri-
cal support for the notion that green supplier development is a relational capability that can enable firms to gain access
to resources and capabilities and combine these relation-specific resources and capabilities in unique and developing
ways, thereby realising competitive advantage through improved supplier performance.
From a practical point of view, our results suggest that more importance should be attached to pollution prevention
initiatives on the procurement side. Green procurement initiatives that focus on reduction of waste and packaging, and
design of easily recyclable products should be promoted. Such green procurement initiatives could facilitate green
supplier development. More importantly, managers need to realise that green procurement alone cannot help in
improving supplier performance. Instead, it is crucial that focal firms participate in improving downstream capabilities
of suppliers. If so, such an involvement will boost suppliers’ service quality and increase their responsiveness, thereby
eventually translating into better products.
6. Conclusion and future research directions

This study sought to advance research in green procurement by considering a model relating firm-level antecedents
(market performance, financial performance and top management commitment), green procurement, green supplier
development and supplier performance. From a practical viewpoint, the study shows that the pursuit of basic green
procurement initiatives is motivated based on legitimacy concerns reflected by market performance alone. This result also
shows that the pursuit of basic and advanced green procurement initiatives needs to be complemented by top management
commitment. Specifically, it seems that top management commitment is even more important in practising green procure-
ment initiatives than market or financial performance measures. Thus, at least for our study, the often-proclaimed belief
that only resource-rich firms will engage in green procurement can be revoked. Furthermore, green supplier development
is showcased as a socially complex, boundary-spanning capability that can not only have a direct positive impact of
supplier performance, but can also function as a crucial mediator of the relationship between green procurement initiatives
and supplier performance. This finding extends past research by suggesting that firms pay greater attention to green
supplier development initiatives due to their ability to improve and facilitate the accomplishment of innovative as well as
emergent sustainability goals. Accordingly, firms must not only develop green procurement capabilities, they must also
develop supplier relationships to capitalise on green markets and, more importantly, improve their stature and reputation
(Porter and Kramer 2006). This finding can be contrasted with research on ‘general’ buyer–supplier partnerships indicating
similar effects for innovativeness of suppliers. Furthermore, it demonstrates that inter-organisational capabilities are cru-
cial, especially when there is a need for a win-win relationship that would benefit the supplier as well.
Although our results provide important explanations for the relationship between firm-level antecedents, green pro-
curement and supplier development initiatives and performance, our research is not without limitations. Therefore, the
remainder of this section focuses on the key limitations of our study along with the opportunities they provide for fur-
ther research. First, when considering antecedents to green procurement practices, this study is parsimonious in nature.
We have studied the impact of market performance, financial performance and top management commitment as anteced-
ents. However, given their significant impact on the firm’s environmental performance, green procurement practices
could be driven by other firm-specific as well as relational antecedents. Therefore, future studies should include factors,
such as organisational learning, environmental entrepreneurship, procurement capability and relational governance mech-
anisms to understand their broader importance in promoting green procurement as well as green supplier development.
The second limitation of this study lies in the trade-off between a more detailed investigation of the several green
measures and a broader scope, including social aspects. In the operationalisation of green procurement and supplier
development constructs, we concentrated only on the environmental perspectives of sustainability. Even though ‘green’
is partially connected to social facets (e.g. safety), many social concerns, such as child labour or minimum wages, must
also be included and investigated by future research.
The third limitation is the relatively small sample size that was used. Although the size of the sample was appropri-
ate for the analyses conducted, a more diverse sample with multiple countries of origin would (1) increase the statistical
power of the results and (2) allow for a more generalised conclusion.
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International Journal of Production Research

ISSN: 0020-7543 (Print) 1366-588X (Online) Journal homepage: http://www.tandfonline.com/loi/tprs20

Green procurement and green supplier

Constantin Blome, Daniel Hollos & Antony Paulraj

To link to this article: http://dx.doi.org/10.1080/00207543.2013.825748

Published online: 08 Aug 2013.

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*Corresponding author. Email: constantin.blome@uclouvain.be

for further research.

2.2 Theoretical grounding

H1: Market performance is positively related to green procurement.

H2: Financial performance is positively related to green procurement.

H3a: Top management commitment is positively related to green procurement.

H3b: Top management commitment is positively related to green supplier development.

3.2 Green procurement and supplier performance

H4a: Green procurement is positively related to supplier performance.

H4b: Green procurement is positively related to green supplier development.

H5: Green supplier development is positively related to supplier performanc.

Table 1. Sample overview.

Sector SIC code n Percentage Annual revenues [Euro] n Percentage

Manufacturing 20–39 70 61.4% <50 million 11 9.6%

Indicators Source Mean Std.Dev. Loadinga

Market performance (CA = 0.833; CR = 0.884; AVE = 0.657)b

Financial performance (CA = 0.946; CR = 0.947; AVE = 0.857)

Top management commitment (CA = 0.868; CR = 0.920; AVE = 0.792)

Green procurement (CA = 0.852; CR = 0.894; AVE = 0.627)

Green supplier development (CA = 0.798; CR = 0.869; AVE = 0.625)

Supplier performance (CA = 0.892; CR = 0.918; AVE = 0.652)

4.3 Non-response bias

4.4 Common method variance

4.5 Data analysis and results

4.5.1 Validity and reliability

Table 3. Cross loadings of indicators.

Indicators MP FP TMC GP GSD SP

MP1 0.868 0.319 0.180 0.300 0.129 0.111

Table 4. Correlations of constructs.

Factors MP FP TMC GP GSD SP

4.5.2 Hypotheses testing

Financial H4b Supplier

Figure 1. Research model.

Table 5. Empirical results of the research model.

Hypotheses Path coefﬁcient t-value Result

Variance explained of endogenous variable R2

5. Discussion and managerial implications

6. Conclusion and future research directions

of Purchasing & Supply Management 3 (1): 21–31.

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