Accepted Manuscript

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

Noor Aslinda Abu Seman, Kannan Govindan, Abbas Mardani, Norhayati Zakuan,
Muhamad Zameri Mat Saman, Robert E. Hooker, Seckin Ozkul

PII: S0959-6526(19)30911-4
DOI: https://doi.org/10.1016/j.jclepro.2019.03.211
Reference: JCLP 16215

To appear in: Journal of Cleaner Production

Received Date: 25 June 2017

Revised Date: 18 March 2019
Accepted Date: 19 March 2019

Please cite this article as: Abu Seman NA, Govindan K, Mardani A, Zakuan N, Mat Saman MZ, Hooker
RE, Ozkul S, The mediating effect of green innovation on the relationship between green supply chain
management and environmental performance, Journal of Cleaner Production (2019), doi: https://
doi.org/10.1016/j.jclepro.2019.03.211.

This is a PDF file of an unedited manuscript that has been accepted for publication. As a service to
our customers we are providing this early version of the manuscript. The manuscript will undergo
copyediting, typesetting, and review of the resulting proof before it is published in its final form. Please
note that during the production process errors may be discovered which could affect the content, and all
legal disclaimers that apply to the journal pertain.
 The Mediating Effect of GreenACCEPTED
Innovation onMANUSCRIPT
the Relationship between Green Supply Chain
Management and Environmental Performance

Noor Aslinda Abu Seman 1, Kannan Govindan 2, Abbas Mardani 3, Norhayati Zakuan 3, Muhamad Zameri Mat
Saman 4, Robert E. Hooker 5, Seckin Ozkul 5
1
Department of Business Management, Faculty of Technology Management and Business, Universiti Tun Hussein Onn
Malaysia (UTHM), 86400 Parit Raja, Johor
2
Center for Sustainable Engineering Operations Management, Department of Technology and Innovation, University of
Southern Denmark, Denmark

PT
3
Azman Hashim International Business School (AHIBS), Universiti Teknologi Malaysia, 81310 Skudai- Johor Bahru, Johor
4
Department of Manufacturing & Industrial Engineering, School of Mechanical Engineering, Faculty of Engineering,

RI
Universiti Teknologi Malaysia (UTM), Johor 81310, Malaysia
5
Department of Marketing, College of Business Administration, University of South Florida, Tampa, FL 33813, United States

SC
Abstract
The emerging environmental awareness of the public, as well as the implementation of governmental

U
regulations, force organizations to employ corporate environmental practices such as green supply chain
AN
management (GSCM) and green innovation. Accordingly, both practices are crucial to achieve
professional improvement in the environmental performance of these organisations. However, research on
M

the relationship of GSCM, green innovation, and environmental performance is relatively rare. Therefore,
this study is aimed to provide empirical evidence showing that GSCM and green innovation practices
significantly improve environmental performance in order to encourage organisations to implement these
D

practices. In addition, this study investigates the relationship between GSCM and green innovation
TE

practices and the influence of these practices on the environmental performance in 123 manufacturing
organisations with ISO 14001 certification. The results of PLS-SEM revealed that there is a significant
EP

and positive relationship between GSCM and green innovation, and the environmental performance.
Moreover, green innovation had a positive effect on the environmental performance. Furthermore, green
innovation had a mediating relationship between GSCM and environmental performance. Therefore, the
C

present paper confirmed the significant influence of GSCM on boosting the green innovation of
AC

organisations and on the manufacturing establishments, which eventually improve the environment. In
brief, the outcomes of this study provide enhanced understanding about the significant role of green
innovation in the manufacturers for improving their GSCM and organisational environmental
performance.

Keywords: Environmental Performance, Green Supply Chain Management (GSCM), Green Innovation,
Environmental, Manufacturing Industry.

1. Introduction

1
 ACCEPTED
The emerging environmental issues MANUSCRIPT
and resource depletion problems have challenged the business
organisations over the recent years. Being a country in transition to a developing, industrialised country in
the Asia-Pacific region (UNDP Report, 2007; Trading Economics, 2016), Malaysia has to cope with
numerous environmental issues and consumption problems due to the rising economic growth. Since the
manufacturing industry in Malaysia has continuously served as an important driver for the highly
industrialised economy, there is an urgent need to monitor the business operations and their impacts on
the overall performance, particularly on the environmental performance of these organisations. This is

PT
due to the substantial environmental risk posed by these business operations, concerning the traffic
congestion, the emission of carbon monoxide, dispensable packaging materials, the utilization of scrapped
toxic materials, and various pollutants from the industrial sectors (Chin et al., 2015; Eltayeb and Zailani,

RI
2009; Eltayeb et al., 2011; Wisner et al., 2014). Therefore, environmental practices such as green supply

SC
chain management (GSCM) and green innovation are beneficial for these business organisations to adopt
in order to attain greener operations. The GSCM and green innovation practices within the business
operations are postulated to improve their business performance.

U
In fact, the GSCM, which is an effort towards environmental sustainability, can be translated into
AN
increased market share and profitability. Accordingly, Rao (2002) indicated that practicing the techniques
of greening the suppliers in the context of GSCM would contribute to greener supplies and increasing
their green innovation. In brief, the implementation of GSCM enhances the quality of green innovation
M

activities that are performed to develop green products. The adoption of these practices also can alleviate
the environmental pressures from the governmental regulations and legislations as well as the public
D

(including the customers, suppliers, buyers, and communities) (Zailaini et al., 2015).
TE

Green innovation is another concept of environmental management, which has been recently
promoted with the goal of eliminating negative environmental consequences (Chen, 2008; Chen and
EP

Chang, 2011). In order to boost the future growth of business organisations, the green innovation is
specifically desired to establish new markets, given its anticipated astonishing growth during the
following decade, which offers numerous potentials and opportunities (Walz and Eichhammer, 2012).
C

The green innovation concept promotes the implementation of GSCM with new approaches and ideas to
AC

manufacturers. Likewise, Chen et al. (2006) asserted that green innovation may boost the implementation
of environmental management, specifically GSCM, to fulfil the environmental requirements of
organisations. The green innovation also presents a common platform for the manufacturing organisations
and their suppliers to cooperate, which potentially increases green innovation activities and enhances the
green products (Van den Bergh et al., 2013). However, this requires constant green innovation for the
implementation of GSCM with respect to the present environmental goals.
Accordingly, this study examined the influence of GSCM and green innovation practices on the
environmental performance of organisations. Despite extensive studies on the positive relationship of

2
 ACCEPTED
GSCM, green innovation, and environmental MANUSCRIPT
performance (Geyer and Jackson, 2004; Zhu and Sarkis,
2004; Chen et al., 2006; Chien and Shieh, 2007; Chen, 2008, Chen et al., 2008; Zhu et al., 2010; Chen
and Chang, 2011), the effect of GSCM on the organisational environmental performance has still
remained inconclusive (Chien and Shih, 2007; Gollagher et al., 2010; Arimura et al., 2011; Chiou et al.,
2011; Eltayeb et al., 2011; Large and Thomsen, 2011; Zailani et al., 2015; Sharma et al., 2017).
Therefore, there is an increasing need to focus on the Malaysian manufacturing industry. To fill this gap,
the present study attempts to find out how the manufacturing organisations increase their environmental

PT
performance through the GSCM and green innovation practices. Addressing the GSCM and green
innovation practices, this paper provides empirical evidences to help the related organisations determine
their ideal environmental strategies.

RI
In addition, this study examines both direct and indirect effects of GSCM and green innovation on the

SC
organisational environmental performance. Studies that emphasised on the indirect assessments are
limited, which contribute insufficient knowledge and analysis. For instance, the relationship among
GSCM, green innovation, and environmental performance remains vague, particularly in the Malaysian

U
manufacturing industry. Essentially, there is a strategic link between GSCM and green innovation when it
AN
comes to the significance of the life cycle of products (Lee and Kim, 2011) to the improvement of
environmental performance. Furthermore, most empirical studies only focused on the relationship
between the concepts of green innovation and green supplier as well as their influence on the competitive
M

advantages and environmental performance (Chen, 2008; Chiou et al., 2011; Lee and Kim, 2011). Thus,
the relationship between GSCM and green innovation practices has still remained in question.
D

Nonetheless, green suppliers, which are associated to the supplier environmental collaboration, are also
TE

part of GSCM practices (Rao, 2002; Shang et al., 2010; Richey Jr et al., 2014). Consequently, the concept
of green suppliers is rather similar to the concept of green purchasing (Rao, 2002; Zhu and Sarkis, 2004).
EP

According to Chiou et al. (2011), it is recommended to explore other GSCM practices as well as the
relationships of green managerial, green process, and green product innovation. There have been limited
empirical evidences to support the capability of GSCM in producing green innovation and improving the
C

environmental performance. As a result, this study explores the direct and indirect effects in order to
AC

comprehensively evaluate these causal relationships.

Apart from that, this study also contributes to innovation activities that potentially improve the green
innovation of the organisations, hence presenting a comprehensive assessment with the consideration of
green innovation in the green supply chain stage (which comprises internal environmental management,
green purchasing, customer environmental cooperation, and reverse logistics). In this study, green
marketing innovation is assessed under the concept of green innovation, wherein only green product
innovation, green process innovation, and green managerial innovation were previously assessed in a
single study. Green marketing innovation is less emphasised in green innovation studies; thus, there are

3
 ACCEPTED
inconclusive measurements for such innovation MANUSCRIPT
in the operations of manufacturing organisations.
However, the measurement adopted by the previous studies in the context of marketing innovation and
green marketing served as the guideline for this study, which was adapted to measure the green marketing
innovations in the context of green innovation. More specifically, this study is aimed to examine the
mediating effect of green innovation on the relationship between GSCM and environmental performance.
In addition, this study also comprehensively discusses the GSCM and green innovation practices as well
as the environmental performance. Adding to that, the present paper is to explore the underlying

PT
relationships of GSCM, green innovation, and environmental performance. Finally, the paper is
concluded with a discussion on the obtained results.

RI
2. Literature review

2.1. Green supply chain management

SC
Green Supply Chain Management (GSCM) involves the practices that potentially minimise the

U
occurrence of environmental issues during the production process of a final product in the manufacturing
organisations (Jabbour and de Sousa Jabbour, 2016; Teixeira et al., 2016; Zhu et al., 2016; Sharma et al.,
AN
2017). GSCM significantly affects the environmental impacts of the supply chain operations, which
potentially enhances the sustainability performance of the organisations. Most studies conducted on
M

GSCM are focused on diverse topics ranging from organisational research to GSCM practices (see Xing
et al., 2016; Laari et al., 2017; Scur and Barbosa, 2017; Sharma et al., 2017; Tramarico et al., 2017).
D

Nonetheless, the field of green supply chain has been only recently introduced, which explains the
TE

inconclusive findings on the green supply chain practices, given that the pertaining theories in this context
are being developed in order to facilitate successful implementation of GSCM practices (Kusi-Sarpong et
al., 2016). The primary objective of GSCM is to minimise the detrimental environmental consequences,
EP

such as pollution, non-sustainable resource consumption, and improper product disposal (Hervani et al.,
2005; Kuei et al., 2015; Laari et al., 2016; Sharma et al., 2017).
C

According to Srivastava (2007), the concept of GSCM has been a subject of discussions since the
AC

revolution of quality in the 1980s and the revolution of supply chain in the 1990s. Essentially, GSCM
integrates green purchasing, reverse logistics, and the process cycle (involving suppliers, manufacturers,
and customers) into the supply chain (Zhu and Sarkis, 2004), wherein the process cycle comprises the
reverse and forward chains in the supply chain operations, or also known as "closing the loop".
Accordingly, it is governed by the escalating adverse environmental impacts. Apart from the
environmental benefits, GSCM also offers beneficial consequences to business operations (e.g., higher
profitability) (Wilkerson, 2005).
In principle, GSCM comprises several practices, including internal environmental management, green
purchasing, customer environmental cooperation, and reverse logistics that have been adopted by several
4
 ACCEPTED
empirical studies (e.g., Zhu et al., 2005; MANUSCRIPT
Zhu and Sarkis, 2006; Zhu et al., 2007a; Zhu et al., 2008a; Zhu
et al., 2008b; Zhu et al., 2010; Ninlawan et al., 2010; Shang et al., 2010; Zhu et al., 2011, Eltayeb et al.,
2011; Rusli et al., 2012). Through the GSCM practices, business operators are able to withstand the
demanding environmental pressures from the governmental regulators as well as the public (buyers,
customers, and communities). The GSCM practices prompt the organisations to improve their overall
performance through green innovation. However, there are limited empirical evidences demonstrating the
relationship between GSCM and green innovation practices in improving the overall organisational

PT
performance. Therefore, ongoing innovations are necessary to successfully address the concerns of all
stakeholders (Porter, 2000).

RI
2.2. Green innovation

SC
Green innovation is referred to as the revolutionary environmental innovation of practices, processes,
managerial, and marketing, which are elicited from the implementation of GSCM that has brought about

U
an improvement in organizations’ environmental performance (Tseng et al., 2013; Cuerva et al., 2014;
AN
Lin et al., 2014; Zailani et al., 2015; Zhu et al., 2016; Li et al., 2017). Green innovation is another
corporate environmental management concept promoted among manufacturing organisations (Chen,
2008; Chen and Chang, 2013; Zailani et al., 2015), which is also similar to the concept of GSCM. In
M

addition, it contributes to the outcomes of GSCM through boosting the performance of environmental
management with respect to the requirements imposed by the present environmental regulations (Chen et
D

al., 2006). Green innovation not only reduces the production costs, but also improves the consistency and
TE

standards of the products as well as the resource productivity (Porter, 2000; Chen et al., 2006).
The internal and external practices of GSCM potentially set off green innovation, which is necessary
EP

for the supply chain management (SCM) of the organisations in the competitive and dynamic
environments with respect to the emerging environmental issues (Chen, 2008) and increasing pressures
from their competitors, consumers, and regulators (Porter, 2000). Therefore, for successful internal
C

environmental, managers and top management of organisations (Zhu and Sarkis, 2004; Zailani et al.,
AC

2015) propel the necessary resource utilisation for the implementation of new technologies and the
acquisition of new knowledge (Eltayeb et al., 2011). These innovations typically involve the process,
product, and marketing attributes to create product differentiation (Zhu et al., 2008a). Accordingly, the
concept of green innovation is pivotal for successful implementation of GSCM.
Studies on green innovation practices in Malaysia are rather limited, but significantly progressive in
the developed countries, e.g., the United States and Sweden (Gluch et al., 2009; Carrion-Flores and Innes,
2010), and other developing countries (Chang, 2011; Zailani et al., 2011; Conding et al., 2012; Alhadid
and Abu-Rumman, 2014; Abdullah et al., 2015; Kucukoglu and Pinar, 2015; Lee et al., 2014; Weng et

5
 ACCEPTED
al., 2015; Zailani et al., 2015). However, MANUSCRIPT
these studies only examined the general concept of green
innovation and were unable to highlight the multidimensionality of green innovation practices
comprehensively (Gluch et al., 2009; Carrion-Flores and Innes, 2010; Zailani et al., 2011; Lee et al.,
2014, Weng et al., 2015). The following studies underlined the adoption of multidimensionality of green
innovation practices to improve the financial and environmental performance of organisations, but limited
to green product innovation (Tseng et al., 2013; Cuerva et al., 2014; Lin et al., 2014; Zailani et al., 2015;
Li et al., 2017), green process innovation (Tseng et al., 2013; Cuerva et al., 2014; Lin et al., 2014; Zailani

PT
et al., 2015; Li et al., 2017), and green managerial innovation (Tseng et al., 2013; Lin et al., 2014; Bar,
2015; Huang et al., 2016).
Nonetheless, the green marketing innovation, as a subset of the holistic concept of green innovation,

RI
has not received adequate attention and it has remained underexplored in existing studies. The green

SC
marketing innovation involves the incorporation of environmental criteria into the product promotion,
such as voluntary eco-labelling, franchising, licensing, and pricing activities. The significance of green
marketing innovation in the concept of green innovation (Reid and Miedzinski, 2008) is multifaceted

U
(Richey Jr et al., 2014; Fuentes, 2015; Peano et al., 2015; Avraham 2016; Zhu and Sarkis, 2016), which
AN
has to be realistically emphasised by organisations today with respect to the sustainable development
theory (Garg, 2015). Essentially, the green marketing innovation represents a higher level of marketing,
which requires the organisations to integrate their distinctive characteristics with marketing environment
M

for the development of effective marketing strategies (Qi and Meili, 2010). Thus, the present study was
aimed to empirically examine the multidimensionality of green innovation practices in Malaysia.
D
TE

2.3. Environmental performance

EP

Environmental performance evaluates the positive impacts of the implementation of GSCM and green
innovation practices on natural environment (Jabbour and de Sousa Jabbour, 2016; Luthra et al., 2016;
Sharma et al., 2017; Sharma and Vredenburg, 1998), which affect either the internal or external
C

environment of the organisations (Eltayeb et al., 2011). There are significant prospects in improving the
AC

environmental performance of manufacturing organisations through environmental management

strategies, such as GSCM and green innovation practices. These environmental practices enable the
organisations to increase their power to stay in the industry. Organisations would become more resilient
and adaptable to the changes when they grasp how to continually improve their processes, reduce the
costs, comply with the regulatory requirements and stakeholders' expectations, and explore new market
opportunities. When organisations encounter environmental problems, inspiring sustainability values to
them has direct impacts on securing sustainable economic success. Apart from the recent emerging
environment issues, the environmental key performance indicators and audits are critical components of

6
environmental management system ACCEPTED
(EMS) as theseMANUSCRIPT
components determine the long-term success of an
organisation (Rossignol, 2014).
Since this study focused on the relationship of GSCM and green innovation in the manufacturing
organisations, the environmental performance of these organisations was considered as the primary
consequence following the implementation of GSCM and green innovation practices. Nonetheless, only
few organisations are willing to make their environmental performance information accessible.
Furthermore, standardised reporting measures are unclear. Therefore, the comparisons of facilities, firms,

PT
products, services, and even countries become significantly challenging due to various types of
approaches adopted in reporting environmental performance.

RI
2.4. Hypotheses development

SC
2.4.1. GSCM and environmental performance

U
Numerous studies have considered the relationship between GSCM practices and environmental
AN
performance (Frosch, 1994; Florida, 1996; Geffen and Rothenberg, 2000; Geyer and Jackson, 2004; Zhu
and Sarkis, 2004; Chien and Shih, 2007; Zhu et al., 2007b; Ninlawan et al., 2010; Zhu et al., 2010;
Azevedo et al., 2011). On the other hand, literature consists of studies arguing over the relationship
M

between these two issues (see Levy, 1995; Arimura et al., 2011; Eltayeb et al., 2011). Therefore, the
question of whether the GSCM practices affects positively or negatively the environmental performance
D

has remained controversial. Through the implementation of GSCM practices, the organisations are
TE

encouraged to improve and sustain their relationship with the suppliers and customers to achieve
enhanced environmental performance (Zhu et al., 2007b). With that, the organisations have to ensure and
EP

monitor their suppliers to provide environmentally friendly materials in a way to minimise negative
environmental impacts during the production processes. Besides, organisations have to perform in a way
to increase and fulfil the customers’ demands for environmentally friendly products. Moreover, the
C

interactions among customers, suppliers, and partners, as well as joint research and development will
AC

promote environmental performance (Zhu et al., 2007b). Apart from improving the environmental
performance, the implementation of GSCM practices also ensure that the organisations and their suppliers
conform to the environmental regulations (Chien and Shieh, 2007). In brief, the adoption of a sustainable
approach, such as GSCM, reduces waste and hazardous materials, lowers the transaction and operational
costs, encourages the practices of reusing and recycling the raw materials, promotes efficient utilisation of
resources, and assists the organisations to conform with the environmental regulations (Chien and Shih,
2007; Tsoulfas and Pappis, 2006 ; Sarkis, 2003). Accordingly, the following hypothesis can be
formulated:

7
 ACCEPTED
H1. There is a positive and direct relationship MANUSCRIPT
between GSCM and environmental performance.

2.4.2. GSCM and green innovation

The relationship between GSCM practices and green innovation is supported by two theories, namely,
evolutionary approach (Nelson and Winter, 1982) and innovation through co-creation model (Prahalad

PT
and Ramasmawy, 2004). Both theories proposed that the interaction between parties or stakeholders that
are involved in the companies’ supply chain process will create more environmental innovation in order
to comply with the great pressures from external factors, especially from government legislation and

RI
regulators. Rao (2002) posited that green suppliers contribute to more green innovations, which suggests

SC
that the GSCM practices are the key drivers in inducing green innovation practices. Several studies have
confirmed the role of GSCM in generating green innovation, but they have not considered the
comprehensive impacts of GSCM on green innovation.

U
The study by Lee and Kim (2011) showed that green innovation can be stimulated through the
AN
environmental cooperation among companies and their important suppliers in developing a new green
product. The findings of Chiou et al. 2011 was confirmed by other researches indicating that greening the
suppliers will positively lead to green innovation (Rao, 2002; Porter and Linde, 1995; Chen et al., 2008,
M

Van den Bergh et al., 2013). In addition, a study conducted by Chang (2011) in Taiwan implied that
business environmental management such as GSCM is positively linked to green product and process
D

innovation. The rationale behind the relationship between GSCM and green innovation can be justified.
TE

The rising concern on environmental issues and regulations from many stakeholders (such as suppliers,
customers, and community) urge companies to work closely with them in the product development
EP

processes (Chiou et al., 2011). This collaboration will then be beneficial to companies in creating
innovation, enhancing the product design and manufacturing process, and developing overall compliance
with environmental regulations (Chiou et al., 2011). Green innovation concept can help the
C

implementation of GSCM by offering new ideas, approaches, and/or technologies to manufacturers in

AC

developing new products. Finally, green innovation is believed to provide continuous ways to innovate
each stage of supply chain in order to gain competitive advantage and decrease the environmental
problems in the industry (Zailani et al., 2011). Therefore, it is postulated that:

H2. There is a positive and direct relationship between GSCM and green innovation.

2.4.3. Green innovation and environmental performance

In regard to green innovation, studies examining the environmental performance as an outcome
variable are limited. For example, Chen et al. (2006), Chen (2008), and Chen and Chang (2013) only
8
considered how green innovation, ACCEPTED MANUSCRIPT
of both process innovation and product innovation, affects the
organisations’ green image and competitive advantage. Thus, these empirical studies were unable to
consider how green process innovation and green product innovation affect the organisations’
environmental performance. Moreover, the extent to which green managerial innovation influences the
environmental performance was out of the scope of these studies. On the other hand, Chiou et al. (2011)
included all three measures of green innovation, which revealed an improved environmental performance
through green process innovation and green product innovation, but insignificant relationship was found

PT
between the managerial innovation and environmental performance. Besides, green innovation is a
significant environmental performance driver, specifically to reduce toxic pollution, which lowers the
cost of stricter meeting between the company and government, consumers, or NGO with the aim of

RI
reducing the pollution in order to encourage successful demands for environmental performance (Carrion-

SC
Flores and Innes, 2010).
The relationship between green innovation and environmental performance has still remained
inconclusive. Moreover, this particular relationship has not been adequately established in the existing

U
literature. In practice, the implementation of green innovation has the potential to significantly improve
AN
the environmental performance bearing in mind that a number of researchers have demonstrated enhanced
performance of other businesses in terms of competitive advantage and green image through this
particular implementation (Chen et al., 2006; Chen, 2008; Chen et al., 2008; Chen and Chang, 2011).
M

High concentration on green product innovation, green process innovation, and green managerial
innovation will benefit these organisations through the increase of cost-savings, improved environmental
D

efficiency, and enhanced productivity and product quality, which directly contribute to an improved
TE

competitive advantage (Porter and Linde, 1995; Chen et al., 2006; Chiou et al., 2011). Furthermore, the
adoption of green innovation potentially lowers the pollution, hazardously toxic waste, and the cost of
EP

hazardous waste disposal, while competently addresses the external environmental pressures from other
stakeholders (such as customers and suppliers) with respect to the environmental regulations (Porter and
Linde, 1995; Chen et al., 2006; Chiou et al., 2011). Thus, it is posited that:
C
AC

H3. There is a positive relationship between green innovation practices and environmental performance.

2.4.4. Mediating effect of green innovation

A review of literature suggests that the implementation of GSCM practices in an organisation

ultimately influence the organisational environmental performance. However, in order to measure the
direct effect of GSCM on the organisational environmental performance, it is necessary to take into
consideration a third (mediating) variable. Green innovation has been known as a mediator in the
relationship between GSCM and organisational environmental performance. In other words, instead of a
9
 ACCEPTEDenvironmental
direct influence from GSCM on organisational MANUSCRIPT
performance, GSCM first affects green
innovation that, in turn, influences the organisational environmental performance. These are known as the
direct and indirect effects (Preacher and Hayes, 2008). According to the Porter hypothesis, strict
environmental regulations that elicit innovation may balance the costs of complying with these
regulations and positively affect the business performance of these organisations (Eiadat et al., 2008). The
Porter hypothesis recommends that the environmental regulations not only affect the business
performance of organisations, but also indirectly encourage these organisations to adopt the green

PT
innovation strategy. Such indirect effect is often referred to as the mediated effect. Thus, the Porter
hypothesis may be viewed as a mediation hypothesis, wherein the green innovation strategy becomes the
mediator between the environmental regulation and environmental performance of organisations. Using

RI
this as a benchmark, this study assumed that the green innovation is potentially a significant mediator

SC
between GSCM and environmental performance.
Despite the limited number of studies performed in this context, these studies considered different
aspects of organisational business performance and discussed the mediating role of green innovation.

U
Eiadat et al. (2008) examined the relationship between the adoption of environmental innovation strategy
AN
and organisational business performance in the chemical industry in Jordan, which confirmed that the
environmental innovation strategy mediates the relationship between relevant environmental pressure
forces (such as governmental regulations, managerial environmental concerns, and perceived importance
M

of stakeholder pressures) and organisational business performance. Additionally, Chang (2011) examined
the positive effects of corporate environmental ethics on the competitive advantage through the mediating
D

effect of green innovation performance in the manufacturing industry in Taiwan. The findings confirmed
TE

that green product innovation mediates the positive relationship between corporate environmental ethics
and competitive advantage, with the exception for green process innovation. In other words, this suggests
EP

that the competitive advantage is directly affected by the corporate environmental ethics and indirectly
affected through green product innovation in the manufacturing industry.
Moreover, the mediation model proposed by Chiou et al. (2011) revealed that the green suppliers
C

contribute to internal green product innovation, green process innovation, and green managerial
AC

innovation, which in turn increases the environmental performance and competitive advantage. This
significant finding suggests that greening the suppliers and green innovation may be highly linked to the
organisational environmental performance and competitive advantage, which verifies the mediating role
of green innovation between GSCM and environmental performance. Following that, this study extended
the GSCM practices, which involved (1) internal environmental management, (2) green purchasing, (3)
customer environmental cooperation, and (4) reverse logistics. Likewise, this paper also extended the
green innovation strategy with the inclusion of green marketing innovation. Additionally, this study

10
 ACCEPTED
comprehensively explored the mediating effect MANUSCRIPT
of green innovation on the enhancement of the
organisational environmental performance. Thus, the following hypothesis can be formulated:

H4. Green innovation mediates the relationship between GSCM and environmental performance.

PT
3. Research method

For the purpose of this research, we adopted a quantitative approach and conducted a survey via mails

RI
and emails using a structured questionnaire set as the research instrument. The research framework
proposed in this study is shown in Fig. 1. The significant strength of the survey as a quantitative data

SC
collection is its flexibility in providing a quantitative description of opinions or attitudes (Cooper and
Schindler, 2003) by studying directly the characteristics of large populations (Salkind, 2009). The

U
sampling frame was the manufacturing organisations with ISO 14001 certification in Malaysia because
AN
the business operations in these organisations are assumed to implement green practices (Sroufe, 2003;
Zhu et al., 2008a). In the Malaysian context, organisations with the ISO 14001 certification are able to
improve their organisational image and customer satisfaction, increase their employees' morale and
M

awareness on the environmental aspects, impacts, and regulations (Abdullah and Fuong, 2010), and boost
their business and operational performance (Nee and Abdul Wahid, 2010). Moreover, these organisations
D

with this particular certification are able to increase their environmental performance in the business
TE

supply chain with respect to the increasing external pressures from the emerging environmental issues.
Therefore, this study only focused on the manufacturing organisations with ISO 14001 certification.
EP

The sampling list was obtained from the Directory of the Federation of Malaysian Manufacturers
(FMM) 2013. The FMM is regionally recognized and acknowledged with the representation of over 2,500
manufacturing and industrial service organisations of different sizes. Therefore, the FMM directory was
C

viewed as the valid representation of the overall population of Malaysian manufacturing organisations for
AC

this study. According to the directory, there are 469 manufacturing organisations with ISO 14001
certification in Malaysia. Given the narrow sampling frame and possibility of low response rate from the
mail survey (Sekaran, 2003), the questionnaire sets were distributed to all 469 manufacturing
organisations. Besides, this study targeted the environmental management representatives (EMRs) of
these manufacturing organisations as the respondents for the survey because these EMRs are familiar
with the green issues of business aspects, namely, the supply chain and innovation in their manufacturing
facilities. The sampling of this study was conducted between May 2014 and December 2014. As a result,

11
 ACCEPTED
this study successfully obtained a total MANUSCRIPT
of 123 questionnaire sets, which accounted for a response rate of
26.23%.

PT
RI
U SC
Fig. 1. Research conceptual framework
AN
To develop the measures, we included totally 63 items in the structured questionnaire set, among
which 27 items pertaining to GSCM (Zhu et al., 2005; Carter et al.; 1998; Min and Galle, 2001; Zsidisin
M

and Siferd, 2001; Eltayeb and Zailani, 2009; Eltayeb et al., 2011; Carter and Ellram, 1998; Rogers and
Tibben-Lembke, 2001; Alvarez-Gil et al., 2007), 20 items to the green innovation (Chen et al., 2006;
D

Reid and Miedzinski, 2008; Bernaur et al., 2006), and 16 items to the environmental performance (Sarkis,
2003; Geyer and Jackson, 2004; Zhu and Sarkis, 2004; Rao and Holt, 2005; Zhu et al., 2007b; Chien and
TE

Shih, 2007; Zhu et al., 2008a; Chiou et al., 2011; Eltayeb et al., 2011; Choudhary and Seth, 2011; Ageron
et al., 2012). In fact, these selected items were adapted from previously-conducted studies displayed in
EP

Appendix 1. These items were measured using the Likert scale of five-point with different measurement
scale for each section. In order to measure the GSCM practices in the manufacturing organisations, the
C

measurement scale ranged as follows: [1] not considering it, [2] planning to consider it, [3] considering it
currently, [4] initiating implementation, and [5] implementing successfully. Meanwhile, the measurement
AC

scale for the green innovation practices included endpoints of "Strongly disagree/Strongly agree". And for
the environmental performance, the measurement scale ranged as follows: [1] not at all, [2] a little bit, [3]
to some degree, [4] relatively significant, and [5] significant.
This study utilised the Predictive Analytics Software (PASW) (version 18), which was formerly
known as the IBM SPSS statistics, to perform descriptive statistics (such as means and frequencies) on
the preliminary data. This study also performed the partial least square-structural equation modelling
(PLE-SEM) using SmartPLS (version 3.2.1) (Ringle et al., 2005) to test the previously stated hypotheses.
The PLS was selected due to the small sample size and the exploratory nature of this study (Hair et al.,
12
 ACCEPTED
2011). The sample size of 123 satisfied MANUSCRIPT
the minimum sample size requirement, as recommended by the
Roscoe’s rule of thumb, which refers to the sample sizes of larger than 30 and less than 500. This study
also performed the two-step approach recommended by Anderson and Gerbing (1988) and Chin (1998) to
analyse and interpret the PLS results with respect to the hypotheses: (1) assessment of reliability and
validity of the measurement (outer) model and (2) testing of the structural (inner) model. For this study,
the reliability analysis included both composite reliability and Cronbach's alpha coefficients, while the
validity analysis included convergent validity and discriminant validity. The mediating analysis was

PT
evaluated using the bootstrapping results (i.e., with 123 observations per subsample, 5000 subsamples,
and no sign changes) to obtain the direct and indirect path coefficients.
Based on a comprehensive review, the reflective constructs with reflective indicators in specifying the

RI
path model for this study were identified, which included GSCM, green innovation, and environmental

SC
performance. The higher-order constructs of this study were considered as the reflective constructs.
Meanwhile, the general concept was established based on several specific dimensions, which is also
referred as the molecular approach (Chin and Gopal, 1995). The construct of GSCM is operationalised as

U
the reflective second-order measurement model according to Zhu et al. (2008b), with four reflective
AN
dimensions as first-order constructs: (1) internal environmental management (IEM), (2) green purchasing
(GP), (3) customer environmental cooperation (CEC), and (4) reverse logistics (RL). The constructs of
green innovation were also modelled as the reflective second-order measurement model, with four
M

reflective dimensions: (1) product innovation (PD), (2) process innovation (PC), (3) managerial
innovation (MN), and (4) marketing innovation (MR). Essentially, the reflective measurement model
D

assumes that the measures or indicators work as the reflection of the theoretical construct (Chin, 1998;
TE

Hulland, 1999). Therefore, this study also considered the environmental performance (EP) as the
reflective construct with reflective measurement items given that these items were not created or directly
EP

caused the environmental performance (formative model), as indicated in the previous literature.
4. Results
C

4.1. Demographic information of respondents

AC

Majority of the respondents (37.4%) were from other types of business activities such as aluminium,
cement, oil and gas, etc., while respondents from the rubber business constituted the least proportion
(4.1%). Additionally, the number of employees reflects the size of the organisations and classifies these
organisations into small and medium-sized enterprises (SMEs) and large enterprises. This study
considered the organisations with 50 to 250 employees as SMEs (i.e., 46%) and the organisations with
over 250 employees as large organisations (i.e., 54.0%). In addition, majority of these respondents were
attached to foreign-based organisations (53.7%), in which the Japanese-based manufacturing
organisations accounted for the majority (24.4%). In regard to the job position, 48.8% of the total

13
respondents were in the managerialACCEPTED MANUSCRIPT
positions. Majority of the EMRs (47.2%) in the manufacturing
organisations were attached to the Environmental Health and Safety, which indicated that most Malaysian
manufacturing organisations employed their EMRs for the related departments to deal with the
environmental issues.

4.2. Measurement model

Prior to evaluating the measurement model, this study assessed the reliability of individual measures,

PT
the reliability for the composite of measures for each construct (internal consistency reliability), and the
validity of individual measures (such as convergent validity and discriminant validity) as shown in Table
1. For this paper, the first considered criterion was the internal consistency reliability, which included

RI
both Cronbach’s alpha coefficients and composite reliability to ascertain the adequacy of the

SC
measurement model. Following the recommendation of Nunnally and Bernstein (1994), the obtained
Cronbach’s alpha values (ranged between 0.710 and 0.946) exceeded the threshold value of 0.70, which
indicated high internal consistency. In addition, the composite reliability values ranged between 0.798

U
and 0.951 (above the threshold value of 0.70), which demonstrated a high reliability (Fornell and Larcker,
AN
1981).
Meanwhile, Hair et al. (2011) recommended the removal of items with loadings between 0.40 and
0.70 and the inclusion of items with loadings of at least 0.708. Thus, this study found that the loadings
M

were acceptable and statistically significant. Apart from that, in this research, the convergent validity was
assessed based on the values of average variance extracted (AVE). All AVE values in this study (ranged
D

between 0.539 and 0.734) exceeded the threshold value of 0.50, which demonstrated a high convergent
TE

validity (Fornell and Larcker, 1981). The factor loadings for the GSCM and green innovation constructs,
which indicated convergent validity at the item level. For the second-order loadings, only several items
EP

(GP2, CEC3, PD1, PC1, PC2, MN1, MN2, MR1, MR3, MR4, and MR5) obtained values of more than
0.708 (p < 0.05), while the loadings of other items were between 0.40 and 0.70 (p < 0.05). This study
particularly removed one item (CEC5) from the measurement model considering its loading of below
C

0.40 (0.392). Since the criteria for both composite reliability and convergent validity (AVE) exceeded the
AC

recommended threshold value, these items with the outer loadings of between 0.40 and 0.70 were retained
in the measurement model. As suggested by Claver-Cortés et al. (2012), certain scale items do not follow
similar considerations when used in theoretical and research contexts other than those in which they were
first developed. Therefore, this study included the items that did not fulfil the minimum requirements of
between 0.40 and 0.70 (p < 0.05) as these loadings would not affect the reliability and validity.
Conceptually, these items were considered significant with respect to their respective constructs.
Additionally, this study was of an explanatory nature in regards to the context of GSCM. In short, all
items in the second order loadings were considered acceptable and statistically significant, which

14
 ACCEPTED
reaffirmed the convergent validity at MANUSCRIPT
the item level. It is worth noting that future studies may need to
consider the suitability of assessing these important constructs in the context of GSCM.

Table 1
Results of reliability analysis and convergent validity.
Construct Item Factor p-value AVE Cronbach’s Composite

PT
loading (Construct level) alpha reliability
GSCM 0.565 0.926 0.798
IEM (reflective) 0.661 0.898 0.920
IEM1 0.574 **

RI
IEM2 0.579 **
IEM3 0.636 **
IEM4 0.588 **

SC
IEM5 0.499 **
IEM6 0.411 **
GP (reflective) 0.604 0.916 0.931
GP1 0.534 **

U
GP2 0.704 **
GP3 0.627 **
GP4 0.679 **
AN
GP5 0.674 **
GP6 0.620 **
GP7 0.683 **
GP8 0.608 **
M

GP9 0.652 **
CEC (reflective) 0.606 0.864 0.900
CEC1 0.672 **
CEC2 0.694 **
D

CEC3 0.744 **
CEC4 0.653 **
TE

CEC5 0.392 **
CEC6 0.408 **
CEC7 0.625 **
RL (reflective) 0.616 0.843 0.889
EP

RL1 0.498 **
RL2 0.496 **
RL3 0.473 **
RL4 0.583 **
C

RL5 0.478 **
Green innovation 0.734 0.918 0.800
Product innovation (reflective) 0.547 0.719 0.826
AC

PD1 0.700 **
PD2 0.645 **
PD3 0.428 **
PD4 0.633 **
Process innovation (reflective) 0.589 0.765 0.849
PC1 0.730 **
PC2 0.735 **
PC3 0.447 **
PC4 0.618 **
Managerial innovation (reflective) 0.539 0.710 0.822
MN1 0.706 **
MN2 0.730 **
MN3 0.575 **
MN4 0.530 **
Marketing innovation (reflective) 0.696 0.890 0.920
15
Construct Item ACCEPTED
Factor p-valueMANUSCRIPT
AVE Cronbach’s Composite
loading (Construct level) alpha reliability
MR1 0.766 **
MR2 0.682 **
MR3 0.806 **
MR4 0.721 **
MR5 0.707 **
Environmental performance (unidimensional construct) 0.549 0.946 0.951
Note: ** denotes statistically significant (p > 0.05).

This paper subsequently assessed the discriminant validity of the measurement model using the cross-
loading method and Fornell-Larcker criterion. Essentially, the former method requires that the outer

PT
loading of an indicator (also known as the first-order loading) on the related construct exceeds all outer
loadings of the other constructs, which is recognised as cross-loading (Hair Jr et al., 2016: p. 105).

RI
Otherwise, when the case of cross-loading exceeds the outer loading of the indicator, it indicates
discriminant validity problem. This study performed the cross-loading method for the GSCM constructs

SC
(internal environmental management, green purchasing, customer environmental collaboration, and
reverse logistics), the green innovation constructs (green product innovation, green process innovation,

U
green managerial innovation, and green marketing innovation), and the environmental performance
construct. The results of cross-loading are presented in Table 2. This study determined the discriminant
AN
validity based on the loadings of indicators as compared to the cross-loadings of other constructs. For
instance, CEC2 on CEC recorded the highest loading (0.887), while the cross-loadings with other
M

constructs were considerably lower (CEC1 on GP recorded 0.568). Similar findings were found for other
CEC indicators as well as the indicators of IEM, GP, RL, PD, PC, MN, MR, RLI, and EP.
D

Table 2
TE

Discriminant validity: cross-loading method.

CEC EP GP IEM MN MR PC PD RL
CEC1 0.662 0.208 0.568 0.384 0.371 0.320 0.335 0.327 0.374
CEC2 0.887 0.230 0.403 0.384 0.361 0.274 0.324 0.261 0.453
EP

CEC3 0.874 0.306 0.519 0.376 0.378 0.344 0.378 0.329 0.466
CEC4 0.844 0.250 0.405 0.280 0.360 0.322 0.259 0.264 0.449
CEC6 0.571 0.079 0.104 0.246 0.120 0.146 0.207 0.082 0.417
C

CEC7 0.778 0.254 0.331 0.268 0.325 0.276 0.282 0.227 0.562
EP1 0.136 0.775 0.240 0.251 0.374 0.195 0.260 0.100 0.364
EP2 0.071 0.666 0.197 0.158 0.257 0.062 0.263 0.024 0.267
AC

EP3 0.119 0.773 0.233 0.234 0.343 0.155 0.323 0.177 0.297
EP4 0.273 0.737 0.375 0.318 0.450 0.286 0.509 0.363 0.356
EP5 0.068 0.640 0.098 0.170 0.232 0.069 0.220 0.031 0.211
EP6 0.284 0.795 0.375 0.425 0.461 0.330 0.430 0.209 0.377
EP7 0.100 0.781 0.213 0.275 0.352 0.306 0.385 0.132 0.207
EP8 0.163 0.803 0.273 0.224 0.419 0.367 0.430 0.265 0.313
EP9 0.079 0.659 0.217 0.370 0.255 0.116 0.240 0.011 0.214
EP10 0.238 0.742 0.297 0.258 0.325 0.282 0.280 0.199 0.278
EP11 0.229 0.737 0.323 0.307 0.368 0.393 0.328 0.290 0.350
EP12 0.002 0.541 0.102 0.194 0.188 0.046 0.162 0.025 0.193
EP13 0.278 0.849 0.377 0.311 0.478 0.336 0.357 0.321 0.330
EP14 0.245 0.803 0.271 0.262 0.400 0.287 0.304 0.251 0.363
EP15 0.383 0.695 0.433 0.382 0.531 0.505 0.358 0.448 0.348

16
 CEC EP ACCEPTED
GP IEMMANUSCRIPT
MN MR PC PD RL
EP16 0.341 0.791 0.467 0.353 0.422 0.443 0.331 0.462 0.376
GP1 0.261 0.298 0.627 0.482 0.355 0.399 0.232 0.339 0.112
GP2 0.445 0.436 0.834 0.372 0.401 0.421 0.317 0.402 0.316
GP3 0.482 0.298 0.756 0.163 0.254 0.349 0.274 0.366 0.348
GP4 0.440 0.285 0.820 0.347 0.393 0.355 0.374 0.311 0.269
GP5 0.445 0.301 0.831 0.305 0.404 0.369 0.324 0.415 0.282
GP6 0.360 0.353 0.668 0.468 0.317 0.254 0.300 0.297 0.267
GP7 0.416 0.286 0.828 0.432 0.331 0.356 0.251 0.281 0.191
GP8 0.375 0.281 0.768 0.249 0.284 0.415 0.196 0.300 0.278
GP9 0.422 0.375 0.829 0.251 0.347 0.411 0.275 0.352 0.271
IEM1 0.403 0.283 0.323 0.834 0.535 0.329 0.342 0.328 0.231

PT
IEM2 0.384 0.272 0.351 0.818 0.513 0.315 0.336 0.345 0.241
IEM3 0.409 0.375 0.406 0.831 0.482 0.304 0.398 0.373 0.328
IEM4 0.368 0.331 0.384 0.846 0.392 0.216 0.204 0.177 0.214

RI
IEM5 0.250 0.346 0.369 0.798 0.295 0.179 0.144 0.064 0.089
IEM6 0.186 0.343 0.278 0.744 0.268 0.139 0.161 0.065 0.045
MN1 0.398 0.365 0.302 0.427 0.810 0.515 0.640 0.507 0.301

SC
MN2 0.381 0.301 0.310 0.317 0.807 0.622 0.563 0.518 0.306
MN3 0.220 0.499 0.268 0.307 0.692 0.377 0.482 0.486 0.289
MN4 0.218 0.418 0.449 0.508 0.607 0.382 0.472 0.397 0.220
MR1 0.303 0.390 0.387 0.307 0.595 0.851 0.541 0.540 0.221

U
MR2 0.208 0.318 0.267 0.253 0.561 0.750 0.482 0.460 0.213
MR3 0.343 0.319 0.434 0.302 0.615 0.892 0.554 0.604 0.222
AN
MR4 0.345 0.293 0.379 0.222 0.474 0.853 0.504 0.524 0.216
MR5 0.340 0.366 0.512 0.212 0.489 0.820 0.433 0.579 0.256
PC1 0.330 0.439 0.362 0.259 0.623 0.502 0.823 0.619 0.241
PC2 0.363 0.336 0.334 0.251 0.638 0.545 0.834 0.544 0.298
M

PC3 0.165 0.293 0.117 0.252 0.386 0.322 0.593 0.253 0.290
PC4 0.302 0.330 0.257 0.284 0.584 0.453 0.795 0.314 0.337
PD1 0.270 0.342 0.460 0.341 0.550 0.520 0.594 0.797 0.199
0.238 0.263 0.355 0.172 0.488 0.556 0.380 0.813 0.216
D

PD2
PD3 0.244 0.142 0.060 0.224 0.431 0.239 0.321 0.555 0.297
PD4 0.246 0.211 0.338 0.131 0.460 0.550 0.416 0.765 0.217
TE

RL1 0.488 0.299 0.216 0.238 0.290 0.196 0.259 0.238 0.729
RL2 0.460 0.303 0.218 0.210 0.293 0.184 0.267 0.206 0.793
RL3 0.362 0.358 0.277 0.138 0.222 0.165 0.252 0.181 0.817
RL4 0.503 0.346 0.358 0.209 0.329 0.234 0.316 0.292 0.837
EP

RL5 0.449 0.364 0.236 0.179 0.361 0.277 0.364 0.254 0.743
Notes: IEM denotes internal environmental management; GP denotes green purchasing; CEC denotes customer environmental
cooperation; RL denotes reverse logistics; PD denotes green product innovation; PC denotes green process innovation; MN
C

denotes green managerial innovation; MR denotes green marketing innovation; EP denotes environmental performance.

In addition, this study also assessed the discriminant validity based on the correlation matrix, as
AC

indicated in Table 3. Table 3 presents the results of the Fornell-Larcker criterion assessment with the
square root of AVEs of the reflective constructs on the diagonal column and the correlations between
these variables in the lower left triangle region. Overall, the square roots of AVEs for IEM (0.831), GP
(0.777), CEC (0.778), RL (0.785), PD (0.740), PC (0.767), MN (0.734), MR (0.835), and EP (0.741)
were higher than the correlations of these variables with other latent variables in the path model. Given
that, all the reflective variables in this study fulfilled both cross-loading method and Fornell-Larcker
criterion, which reaffirmed the convergent validity and discriminant validity of these constructs.
Accordingly, the measurement model in this study was deemed reliable and valid.
17
Table 3 ACCEPTED MANUSCRIPT
Discriminant validity: Fornell Larcker criterion.
CEC EP GP IEM MN MR PC PD RL
CEC *0.778
EP 0.296 *0.741
GP 0.525 0.417 *0.777
IEM 0.422 0.398 0.436 *0.813
MN 0.426 0.525 0.443 0.521 *0.734
MR 0.370 0.404 0.476 0.312 0.657 *0.835
PC 0.390 0.458 0.366 0.336 0.730 0.604 *0.767
PD 0.334 0.335 0.439 0.293 0.652 0.650 0.588 *0.740

PT
RL 0.579 0.425 0.336 0.249 0.382 0.270 0.372 0.301 *0.785
Note: * signifies √AVE.

RI
4.3 Structural model

This study subsequently performed the PLS analysis to examine the efficiency of the proposed model.

SC
The results of the PLS estimation (direct effects) are shown in Fig. 2, which included the explained
variance (R2), statistical significance, and path coefficients. In addition, this study applied the

U
bootstrapping method to determine the significance of these paths. Furthermore, the R2 values were
AN
considered for the endogenous constructs as the predictive power of this proposed model. For instance,
the green innovation recorded the R2 value of 0.347, which indicated that the GSCM accounted for
approximately 35% of the total variance in green innovation. Meanwhile, GSCM and green innovation
M

accounted for approximately 32% of the total variance in environmental performance.

D

4.4 Results of direct effect and mediating effect

TE

It was ascertained that GSCM had a strong direct relationship with both environmental performance
(H1; β = 0.320; p < 0.05, t = 2.728) and green innovation (H2; β = 0.589; p < 0.05, t = 9.253).
EP

Additionally, the relationship between green innovation and environmental performance was significantly
strong (H3; β = 0.313; p < 0.05, t = 2.783), thus supporting H1, H2, and H3.
Subsequently, this study examined the mediating effect. In the mediator analysis procedure suggested
C

by Hair et al. (2016: p. 224), the first step required the PLS path model to be estimated without the
AC

potential mediator variable green innovation. The direct path coefficients values are obtained using PLS
Algorithm function, while t-values that confirm their significance are obtained by conducing the
bootstrapping procedure (i.e., with 123 observations per subsample, 5000 subsamples, and no sign
changes). The relationship between GSCM and environmental performance is significant (i.e., 0.504**).
There is still no mutual agreement, and some opinions differ as to whether the relationship between the
exogenous and endogenous variables has to be significant before the inclusion of potential mediator
(Zhao et al., 2010). The second step requires the researcher to include the mediator variable to test
whether the indirect effect of GSCM, through the green innovation mediator variable, on environmental

18
 ACCEPTED
performance is significant. After including MANUSCRIPT
the mediator, a required condition is the significance of the
relationship between GSCM and green innovation (i.e., 0.589**), as well as between green innovation
and environmental performance (i.e., 0.313**). This was confirmed by the evaluation of the structural
model results discussed in the previous section. The indirect effect’s size is 0.589 × 0.313 = 0.184, and
its significance is again examined using the bootstrapping results (i.e., with 123 observations per
subsample, 5000 subsamples, and no sign changes). The bootstrapping results in the product of two path
coefficients with indirect effect via mediator.

PT
0.689**
IEM
(11.72)

RI
0.837**
GP (22.03) 0.320 **
0.000 (2.728) 0.318

SC
GSCM EP
CEC 0.818**
(22.62)

RL 0.644** 0.589 **

U 0.313 **
AN
(9.375) (9.523) (2.783)
M

0.347

GI
D
TE

0.825** 0.841** 0.875** 0.883**

(23.46) (24.9) (32.49) (31.07)

PD PC MN MR
EP

Fig. 2. PLS results for direct effects

Notes: ** indicates p < 0.05, t-value in the parentheses.
C

The results indicated partial mediating effect of green innovation on the relationship between GSCM
and environmental performance (H4; β = 0.184; p < 0.05, t = 2.429). This study then determined the
AC

strength of the mediating effect by computing the variance account for (VAF) as the ratio between the
direct and indirect effects. Principally, the VAF complements the assessment of mediation through the
bootstrapping procedure, in which VAF of above 80% indicates full mediation; VAF of between 20% and
80% shows partial mediation, and below 20%, it demonstrates no mediation. The calculation of VAF for
this study is presented in the following:

Direct effect of GSCM → EP = 0.589 × 0.313 = 0.184

Indirect effect of GSCM → EP via Green innovation = 0.184

19
 ACCEPTED
Total effect of GSCM → EP = 0.184 MANUSCRIPT
+ 0.184 = 0.368

VAF = Direct effect / Total effect = 0.184 / 0.368 = 0.50

Consequently, 50% of the total effect of GSCM on the environmental performance was explained via
green innovation as the mediator of partial mediation, which supported H4. Overall, all the hypotheses of
this study were accepted.

PT
5. Discussion

This study examined the effect of GSCM and green innovation on the enhancement of organisational

RI
environmental performance. This study was specifically aimed to ascertain the relationship of GSCM,
green innovation, and environmental performance. Moreover, the model proposed in this paper was

SC
validated, which demonstrated that successful implementation of GSCM and green innovation practices
enhances the organisational environmental performance. More specifically, the resultant outcomes of this

U
study suggested that: (1) the implementation of GSCM increases the value of green innovation; (2) the
implementation of GSCM and green innovation practices has strong positive influence on the
AN
organisational environmental performance; and (3) organisations are indeed compelled to adopt
innovative green practices and continuously strive to innovate to survive in highly competitive markets.
M

In addition, this research revealed a strong relationship between GSCM and environmental
performance, which reaffirmed the findings of existing studies and extended the corresponding themes
D

(Lee et al., 2014; Jabbour and de Sousa Jabbour, 2016; Luthra et al., 2016; Sharma et al., 2017). The
TE

relationship between GSCM and environmental performance is expected to be positive based on the
results of these studies. This paper highlighted the importance of GSCM for manufacturing organisations
in Malaysia to advance competitively and improve their environmental performance. The positive, strong,
EP

direct effect of GSCM on green innovation demonstrated the significance of GSCM to the improvement
of green innovation of these organisations; this issue was also in line with existing studies (Chiou et al.,
C

2011; Rusli et al., 2012; Van den Berg et al., 2013; Mohd Rozar et al., 2015; Teixeira et al., 2016;
AC

Sharma et al., 2017). This study also revealed the significant, positive, direct effect of green innovation
on organisational environmental performance. Through the implementation of green practices, such as
green innovation, organisations can withstand the demanding environmental pressures by sustaining and
improving their environmental performance significantly. This also demonstrates the importance of
developing green innovation practices in the manufacturing organisations, which serves as a novel
strategic method for the involved managers.
Apart from that, the present research exhibited indirect effect of GSCM on the environmental
performance through the mediating role of green innovation; these findings were also confirmed by the
other existing studies focusing on the direct relationship of GSCM, green innovation, and environmental
20
 ACCEPTED
performance (Chiou et al., 2011; Van den Berg etMANUSCRIPT
al., 2013). Additionally, the standardised regression
weight for the direct relationship between green innovation and environmental performance was found to
be significantly positive. Given that all the direct and indirect relationships between GSCM and
environmental performance were statistically significant, the mediating relationship of green innovation
and environmental performance was ascertained, which implies that the increase in GSCM potentially
results in higher green innovation and simultaneously boosts the organisational environmental
performance.

PT
The emerging environmental issues prompt the organisations to continuously improve their green
capabilities within their supply chain and adopt innovative green practices in a way to enhance their
environmental performance. This study has made various contributions and implications of both

RI
theoretical and managerial aspects. First, it proposed a model based on the relationship of GSCM, green

SC
innovation, and organisational environmental performance, which serves for the future studies on the
sustainability management, specifically those that will address the role of GSCM and green innovation in
the manufacturing industry. This paper also provided empirical evidence for the effects of GSCM and

U
green innovation practices on improving the organisational environmental performance. The findings of
AN
this study are expected to provide essential insights in order to guide the manufacturing organisations in
Malaysia as well as related practitioners to boost their organisational environmental performance through
the implementation of GSCM and green innovation.
M

Second, the present paper extended the existing knowledge base on GSCM and green innovation in
the Malaysian context that can represent the developing countries. As previously discussed, the studies on
D

GSCM and green innovation in the developing countries are limited, which propelled this study to assess
TE

the implementation of GSCM in Malaysia as well as the multidimensionality of green innovation and its
mediating effects. Existing studies, particularly those conducted on green innovation, are limited to the
EP

product, process, and managerial aspects. To fill this gap, this study included another aspect of green
innovation, namely marketing innovation. In the present research, the existing green innovation aspects in
Malaysia were empirically explored, which subsequently led to the proposed model. The results of the
C

PLS-SEM also showed the validity of the GSCM and green innovation concepts in Malaysia. In fact, this
AC

pioneering study extended the exploration of GSCM and green innovation in Malaysia, which is of one of
the developing countries.
Third, the present paper identified potential GSCM and green innovation practices to enhance
environmental performance, which have to be further explored. It also derived a tested and tried
conceptual model, which can assist and simplify the implementation of GSCM and green innovation
practices for local manufacturers and suppliers. Moreover, the developed model potentially enables the
manufacturers to recognise the existing gap between their current practice and the ideal practice in
comparison to their competitors and develop the necessary strategy to fill the gap. Based on the obtained

21
 ACCEPTED
results presented in Table 5, this research MANUSCRIPT
also indirectly identified the practices that can have the highest
impact on the implementation of GSCM and green innovation as well as the practices that require further
improvement. Similarly, findings of the present paper can help manufactures not only to identify the key
indicators of successful implementation as well as other indicators that require further improvement, but
also to strategically improve the possible indicators or practices for effective implementation of GSCM
and green innovation.

PT
6. Limitations and recommendations for future studies

RI
There were several limitations to this research. First, this study depended on single environmental

SC
management representative (EMR) of each Malaysian-based manufacturing organisation, which raised
potential common method bias. Therefore, the dependence of this study on a single EMR from each
organisation to examine the green practices may be biased and subjective, as the respondents may not

U
have comprehensive perspective of the overall supply chain of the organisation. In addition, the small
AN
sample size may not reflect conclusive or generalised findings due to the exploratory nature of this study.
Therefore, it is recommended that for future studies, it is better to consider two or more managers from
each organisation to minimise bias and increase the response rate.
M

Second, this research only utilised organisational environmental performance to measure the
implementation of GSCM and green innovation practices. However, the measures participating in this
D

study are, after all, subjective in nature. For the purpose of this paper, we adapted the scales of
TE

environmental performance extracted from previous studies focusing on the concept of environmental
management. Thus, it was challenging to measure objectively the environmental performance. Moreover,
EP

the subjective measures were used to compose the constructs for the respondents to respond conveniently.
Future studies need to consider the objective measures of environmental performance or capture other
dimensions of performance, such as economic performance, operational performance, and competitive
C

advantage.
AC

Finally, the nature of the data was of cross-sectional, rather than longitudinal. Cross-sectional studies
of a series of dynamic concepts (e.g., GSCM and green innovation) involve analysis at one specific point
in time and not overall conduct through a period of time. Therefore, the cause-effect relationships cannot
be concluded. In the present research, the severity of this problem was minimised to enable the dynamic
characteristics and verification of cause and effect when the relationships were based on theoretical
rationalisations. Therefore, the results of this study were not necessarily interpreted as evidence of
underlying causal relationships, but rather supported a prior casual scheme. Nonetheless, both results and

22
 ACCEPTED
limitations of this study emphasised the need of MANUSCRIPT
performing future studies in this context through a
longitudinal approach.

Appendix 1. Questionnaire items

Internal environmental management

IEM1 Commitment of GSCM from senior managers.

PT
IEM2 Support for GSCM from mid-level managers.
IEM3 Cross-functional collaboration for environmental improvement.
IEM4 Total quality environmental management.

RI
IEM5 Environmental compliance and auditing activities.
IEM6 Environmental management system exists.

SC
Green purchasing

GP1 Provides design specifications to suppliers that include environmental requirements for purchased
items.

U
GP2 Requires suppliers to develop and maintain an environmental management system (EMS).
AN
GP3 Requires suppliers to have a certified EMS such as ISO 14001.
GP4 Uses a questionnaire to collect information about suppliers’ environmental aspects, activities and/or
management systems.
GP5 Makes sure that suppliers’ purchased products must contain green attributes such as recycled or
M

reusable items.
GP6 Makes sure that suppliers’ purchased products must not contain environmentally undesirable items
such as lead or other hazardous or toxic materials.
D

GP7 Evaluates suppliers based on specific environmental criteria.

GP8 Evaluates the environmental aspects of second-tier suppliers.
TE

GP9 Makes sure that suppliers meet its environmental objectives.

Customer environmental cooperation

EP

CEC1 Cooperation with customers for eco-design cooperation.

CEC2 Cooperation with customers for cleaner production cooperation.
CEC3 Cooperation with customers for green packaging cooperation.
C

CEC4 Cooperation with customers for using less energy during product transportation.
CEC5 Adopting third-party-logistics.
AC

CEC6 Cooperation with customers for product takes back.

CEC7 Cooperation with customers for reverse logistics relationships.

Reverse logistics

RL1 Collects back used products from customers for recycling, reclamation of materials, or reuse.
RL2 Collects back used packaging from customers for reuse or recycling.
RL3 Returns back company’s products to suppliers for recycling, retaining of materials, or
remanufacturing.
RL4 Returns back company’s packaging to suppliers for reuse or recycling.
RL5 Returns back the products from customers for safe refill.

23
Green product innovation ACCEPTED MANUSCRIPT

PD1 Using environmentally friendly material.

PD2 Improving and designing environmentally friendly packaging (e.g. less paper and plastic material
used) for existing and new products.
PD3 Recovery of company’s end-of-life products and recycling.
PD4 Using eco-labeling (i.e. logo that indicate an environmentally preferable standard).

Green process innovation

PC1 Low energy consumption (e.g. water, electricity, gas, etc.) during production, use or disposal.

PT
PC2 Use of cleaner technology to make savings and avoid pollution such as energy, water and waste.
PC3 Recycling, reusing and remanufacturing of materials internal to the company.
PC4 Investing in plant and equipment, lighting, heating and services that tailored to the environmental

RI
evaluation.

Green managerial innovation

SC
MN1 Redefine production and operation process to ensure internal efficiency that can help to implement
GSCM.
MN2 Re-designing and improving product or services to obtain new environmental criteria or directives.

U
MN3 Encourage and motivate employees to adopt a responsible attitude to remove waste.
AN
MN4 Managing environmental audits regularly and implements any corrective actions.

Green marketing innovation

M

MR1 Using green issues in overall corporate message to sell new lifestyles and idea that can help to
attract new market opportunities.
MR2 Be committed to investing in green research and development initiatives.
D

MR3 Using green marketing (i.e. product packaging, product placement, product promotion/selling) to
make customers aware of environmentally friendly business.
TE

MR4 Improving brand loyalty and brand reputation by being environmentally friendly business.
MR5 Continually remind customers in advertisement of eco-friendly product.
MR6 Applying environmentally friendly business into the whole of company’s franchises.
MR7 Renewing and improving company licensing that meets with environmental directives.
EP

MR8 Participation in community activities to gain their view in developing green product that also meets
with their needs and demand.
C

Environmental performance
AC

EP1Reduced emission of air pollution.

EP2 Reduced wastewater pollution.
EP3 Reduced solid waste disposal.
EP4 Reduced consumption of hazardous, harmful, or toxic materials.
EP5 Reduced frequency of environmental accidents.
EP6 Improved environmental situation of organisations.
EP7 Reduced consumption of materials and resources (such as water, electricity, gas, and petrol).
EP8 Reduced energy consumption.
EP9 Improved compliance to the environmental regulations.
EP10 Improved health of employees and community.
EP11 Promote reuse and recycling of raw materials.
EP12 Avoid being fined for violating the environmental regulations.

24
 ACCEPTED
EP13 Improved efficiency in resource utilisation. MANUSCRIPT
EP14 Reduced environmental cost.
EP15 Improved "green image".
EP16 Improved relationships with the customers and suppliers.

References
Abdullah, H., & Fuong, C. 2010. The Implementation of ISO 14001 Environmental Management System
in Manufacturing Firms in Malaysia. Asian Social Sciences, 6(3), 100-107.
Abdullah, N. A., & Yaakub, S. 2015. The pressure for reverse logistics adoption among manufacturers in
Malaysia. Asian Journal of Business and Accounting, 8(1), 152-177.
Ageron, B., Gunasekaran, A., & Spalanzani, A. 2012. Sustainable supply management: an empirical

PT
study. International of Journal Production Economics, 140, 168-182.
Alhadid, A., & Abu-Rumman, H. 2014. The impact of green innovation on organizational performance,
environmental management behavior as a moderate variable: an analytical study on Nuqul Group in

RI
Jordan. International Journal of Business and Management, 9 (7), 51-58.
Álvarez-Gil, M. J., Berrone, P., Husillos, F. J., & Lado, N. 2007. Reverse logistics, stakeholders'
influence, organizational slack, and managers' posture. Journal of Business Research, 60, 463-473.

SC
Anderson, J., & Gerbing, D. 1988. Structural equation modeling in practice: a review and recommended
two-step approach. Psychological Bulletin, 103(3), 411-423.
Arimura, T., Darnall, N., & Katayama, H. 2011. Is ISO 14001 a gateway to more advanced voluntary
action? The case of green supply chain management. Journal of Environmental Economics and

U
Management, 61, 170-182.
AN
Avraham, E. 2016. Destination marketing and image repair during tourism crises: the case of Egypt.
Journal of Hospitality and Tourism Management, 28, 41-48.
Azevedo, S., Carvalho, H., & Machado, V. 2011. The influence of green practices on supply chain
performance: a case study approach. Transportation Research Part E, 47, 850-871.
M

Bernauer, T., Engles, S., Kammerer, D., & Seijas, J. 2006. Explaining green innovation: ten years after
Porter’s win-win proposition: how to study the effects of regulation on corporate environmental
innovation? CIS Working Paper (17), 1-17. Center for Comparative and International Studies (CIS)-
D

ETH Zurich.
Carrion-Flores, C., & Innes, R. 2010. Environmental innovation and environmental performance. Journal
TE

of Environmental Economics and Management, 59, 27-42.

Carter, C., & Ellram, L. 1998. Reverse logistics: a review of the literature and framework for future
investigation. Journal of Business Logistic, 19(1), 85-102.
Carter, C., Ellram, L., & Ready, K. 1998. Environmental purchasing: benchmarking our German
EP

counterparts. Journal of Supply Chain Management, 34(4), 28-38.

Chang, C. -H. 2011. The influence of corporate environmental ethics on competitive advantage: the
mediation role of green innovation. Journal of Business Ethics, 104, 361–370.
C

Chen, Y., & Chang, K. 2011. The nonlinear effect of green innovation on the corporate competitive
advantage. Quality and Quantity, 47(1), 271-286.
AC

Chen, Y. -S. 2008. The driver of green innovation and green image–green core competence. Journal of
Business Ethics, 81, 531-543.
Chen, Y. -S., & Chang, K. -C. 2013. The nonlinear effect of green innovation on the corporate
competitive advantage. Quality & Quantity, 47, 271-286.
Chen, Y. -S., Lai, S. -B., & Wen, C. -T. 2006. The influence of green innovation performance on
corporate advantage in Taiwan. Journal of Business Ethics, 67, 331-339.
Chen, J., He, J., Wang, J., & Chen, K. 2008. Perspective of green innovation, green supplier capacity
explore competitive advantages with green supply chain management. International Conference on
Business and Information.
Chien, M., & Shih, L. -H. 2007. An empirical study of the implementation of green supply chain
management practices in the electrical and electronic industry and their relation to organizational
performances. International Journal of Environmental Science and Technology, 4, 1735-1472.

25
Chin, T. A., Tat, H. H., & Sulaiman, ACCEPTED
Z. 2015.MANUSCRIPT
Green Supply Chain Management, Environmental
Collaboration and Sustainability Performance. Procedia CIRP 26, 695-699.
Chin, W. W., & Gopal, A. 1995. Adoption intention in GSS: relative importance of beliefs. The Data
Base for Advances in Information Systems, 26(2-3), 42-64.
Chin, W. 1998. The partial least squares approach for structural equation modeling, in Marcoulides, G.A.
(Ed.). NJ: Lawrence Erlbaum Associates, Mahwah, NJ.
Chiou, T. -Y., Chan, H. K., Lettice, F., Chung, S. H. 2011. The influence of greening the suppliers and
green innovation on environmental performance and competitive advantage in Taiwan. Transportation
Research Part E: Logistics and Transportation Review, 47, 822-836.
Choudhary, M., & Seth, N. 2011. Integration of green practices in supply chain environment: the
practices of inbound, operational, outbound and reverse logistics. International Journal of Engineering

PT
Science and Technology, 3(6), 4985-4993.
Claver-Cortés, E., Pertusa-Ortega, E. M., Molina-Azorín, J. F. 2012. Characteristics of organizational
structure relating to hybrid competitive strategy: implications for performance. Journal of Business

RI
Research, 65, 993-1002.
Conding, J., Habidin, N. F., Zubir, A. F. M., Hashim, S., & Jaya, N. 2012. The structural analysis of
green innovation (GI) and green performance (GP) in Malaysian automotive industry. Research

SC
Journal of Finance and Accounting, 3, 172-178.
Cooper, D., & Schindler, P. 2003. Business Research Methods (Eight Edition ed.). Singapore: McGraw-
Hill.
Cuerva, M. C., Triguero-Cano, Á. & Córcoles, D. 2014. Drivers of green and non-green innovation:

U
empirical evidence in low-tech SMEs. Journal of Cleaner Production, 68, 104-113.
AN
Eiadat, Y., Kelly, A., Roche, F., & Eyadat, H. 2008. Green and competitive? An empirical test of the
mediating role of environmental innovation strategy. Journal of World Business, 43, 131–145.
Eltayeb, T. K., & Zailani, S. 2009. Going green through green supply chain initiatives towards
environmental sustainability. Operations and Supply Chain Management, 2, 93-110.
M

Eltayeb, T. K., Zailani, S., & Ramayah, T. 2011. Green supply chain initiatives among certified
companies in Malaysia and environmental sustainability: investigating the outcomes. Resources,
Conservation and Recycling, 55, 495-506.
D

Florida, R. 1996. Lean and green: the move to environmentally conscious manufacturing. California
Management Review, 39(1), 80–105.
TE

Frosch, R. 1994. Industrial ecology: minimizing the impact of industrial waste. Physics Today, 47(11),
p63.
Fuentes, C. 2015. How green marketing works: practices, materialities, and images. Scandinavian Journal
of Management, 31, 192-205.
EP

Garg, A. 2015. Green marketing for sustainable development: an industry perspective. Sustainable
Development, 23, 301-316.
Geffen, C., & Rothenberg, S. 2000. Suppliers and environmental innovation: the automotive paint
C

process. International Journal of Operations and Production Management, 20(2), 166-168.

Geyer, R., & Jackson, T. 2004. Supply loops and their constraints: the industrial ecology of recycling and
AC

reuse. California Management Review, 46(2), 55–73.

Gluch, P., Gustafsson, M., & Thuvander, L. 2009. An absorptive capacity model for green innovation and
performance in the construction industry. Construction Management and Economics, 27, 451–464.
Gollagher, M., Sarkis, J., Zhu, Q., Geng, Y., Fujita, T., & Hashimoto, S. 2010. Green supply chain
management in leading manufacturers: case studies in Japanese large companies. Management
Research Review, 33, 380-392.
Hair Jr, J. F., Hult, G. T. M., Ringle, C., & Sarstedt, M. 2016. A primer on partial least squares structural
equation modeling (PLS-SEM). Sage Publications.
Hair, J., Ringle, C., & Sarstedt, M. 2011. PLS-SEM: indeed a silver bullet. Journal of Marketing Theory
and Practice, 19(2), 139-151.
Hervani, A. A., Helms, M. M., & Sarkis, J. 2005. Performance measurement for green supply chain
management. Benchmarking: An international journal, 12, 330-353.

26
Huang, X. -x., Hu, Z. -p., Liu, C. -s.,ACCEPTED
Yu, D. -j., & MANUSCRIPT
Yu, L. -f. 2016. The relationships between regulatory
and customer pressure, green organizational responses, and green innovation performance. Journal of
Cleaner Production, 112, Part 4, 3423-3433.
Hulland, J. 1999. Use of partial least squares (PLS) in strategic management research: a review of four
recent studies. Strategic Management Journal, 20 (2), 195-204.
Jabbour, C. J. C., & de Sousa Jabbour, A. B. L. 2016. Green human resource management and green
supply chain management: linking two emerging agendas. Journal of Cleaner Production, 112, Part 3,
1824-1833.
Kucukoglu, M., & Pinar, R. 2015. Positive influences of green innovation on company performance.
World Conference on Technology, Innovation and Entrepreneurship, 195, 1232 – 1237.
Kuei, C. -h., Madu, C. N., Chow, W. S., & Chen, Y. 2015. Determinants and associated performance

PT
improvement of green supply chain management in China. Journal of Cleaner Production, 95, 163-173.
Kusi-Sarpong, S., Sarkis, J., & Wang, X. 2016. Assessing green supply chain practices in the Ghanaian
mining industry: a framework and evaluation. International Journal of Production Economics, 181,

RI
Part B, 325-341.
Laari, S., Töyli, J., & Ojala, L. 2017. Supply chain perspective on competitive strategies and green supply
chain management strategies. Journal of Cleaner Production, 141, 1303-1315.

SC
Laari, S., Töyli, J., Solakivi, T., & Ojala, L. 2016. Firm performance and customer-driven green supply
chain management. Journal of Cleaner Production, 112, Part 3, 1960-1970.
Large, R. O., & Thomsen, C. G. 2011. Drivers of green supply management performance: evidence from
Germany. Journal of Purchasing and Supply Management, 17, 176-184.

U
Lee, K. H., & Kim, J. W. 2011. Integrating suppliers into green product innovation development: an
AN
empirical case study in the semiconductor industry. Business Strategy and the Environment, 20, 527-
538.
Lee, V. -H., Ooi, K. -B., Chong, A. Y. -L., & Seow, C. 2014. Creating technological innovation via green
supply chain management: an empirical analysis. Expert Systems with Applications, 41, 6983-6994.
M

Levy, D. 1995. Heterogeneity and change in environmental strategy: technological and political responses
to climate change in the automobile industry. In A. Hoffman, & M. Ventresca, Organizations, Policy
and the Natural Environment: Institutional and Strategic Perspectives (pp. 173-93). Stanford: Stanford
D

University Press, Palo Alto, California, U.S.

Li, D., Zheng, M., Cao, C., Chen, X., Ren, S., & Huang, M. 2017. The impact of legitimacy pressure and
TE

corporate profitability on green innovation: evidence from China top 100. Journal of Cleaner
Production, 141, 41-49.
Lin, H., Zeng, S. X., Ma, H. Y., Qi, G. Y., & Tam, V. W. Y. 2014. Can political capital drive corporate
green innovation? Lessons from China. Journal of Cleaner Production, 64, 63-72.
EP

Luthra, S., Garg, D., & Haleem, A. 2016. The impacts of critical success factors for implementing green
supply chain management towards sustainability: an empirical investigation of Indian automobile
industry. Journal of Cleaner Production, 121, 142-158.
C

Min, H., & Galle, W. 2001. Green purchasing practices of US firms. International Journal of Production
and Operations Management, 21(9), 1222–38.
AC

Mohd Rozar, N., Mahmood, W., Hasrulnizzam, W., Ibrahim, A., & Razik, M. A. 2015. A study of
success factors in green supply chain management in manufacturing industries in Malaysia. Journal of
Economics, Business and Management, 3, 287-291.
Nee, G., & Abdul Wahid, N. 2010. The Effect of ISO 14001 Environmental Management System
Implementation on SMEs Performance: An Empirical Study in Malaysia. Journal of Sustainable
Development, 3(2), 215-220.
Nelson, R., & Winter, S. 1982. An Evolutionary Theory of Economic Change. Cambridge: Harvard
University Press.
Ninlawan, C., Seksan, P., Tossapol, K., & Pilada, W. 2010. The implementation of green supply chain
management practices in electronics industry. Proceedings of the International Multiconference of
Engineers and Computer Scientists, III, pp. 978-988. Hong Kong.
Nunnally, J. C., & Bernstein, I. 1994. The assessment of reliability. Psychometric Theory, 3, 248-292.

27
Peano, C., Baudino, C., Tecco, N., ACCEPTED
& Girgenti, MANUSCRIPT
V. 2015. Green marketing tools for fruit growers
associated groups: application of the Life Cycle Assessment (LCA) for strawberries and berry fruits
Eco branding in northern Italy. Journal of Cleaner Production, 104, 59-67.
Porter, M. E., & Linde, C. 1995. Green and competitive. Harvard Business Review, 73(5), 120-134.
Porter, M. E., 2000. Green and Competitive: Ending the Stalemate. The Dynamics of the eco-efficient
economy: environmental regulation and competitive advantage, 33.
Prahalad, C., & Ramaswamy, V. 2004. Co-creating unique value with customers. Strategy & Leadership,
32(3), 4-9.
Preacher, K. J., & Hayes, A. F. 2008. Asymptotic and resampling strategies for assessing and comparing
indirect effects in multiple mediator models. Behavior Research Methods, 40, 879-891.
Qi, W., & Meili, L. 2010. Green marketing innovation of Zibo ceramic industry in the low-carbon

PT
economy era. Proceedings of International Conference on the Growth of Firms and Management
Innovation 10, 237-241.
Rao, P., & Holt, D. 2005. Do green supply chains lead to competitiveness and economic performance?

RI
International Journal of Operations and Production Management, 25(9), 898-916.
Rao, P. 2002. Greening the supply chain: a new initiative in South East Asia. International Journal of
Operations & Production Management, 22, 632-655.

SC
Reid, A., & Miedzinski, M. 2008. Eco-innovation: final report for sectoral innovation watch. Systematic
Eco-Innovation Report. Brussels: Europe Innova, 1-101.
Richey Jr, R. G., Musgrove, C. F., Gillison, S. T., & Gabler, C. B. 2014. The effects of environmental
focus and program timing on green marketing performance and the moderating role of resource

U
commitment. Industrial Marketing Management, 43, 1246-1257.
AN
Ringle, C. M., Wende, S., & Will, A. 2005. SmartPLS 2.0 (Beta). Hamburg. Retrieved from Available at
http://www.smartpls.de
Rogers, D., & Tibben-Lembke, R. 2001. An examination of reverse logistics practices. Journal of
Business Logistics, 22(2), 129-48.
M

Rossignol, A. 2014. ISO 14001: How EMS Adds Value to Firms. Retrieved August 23, 2016, from
Network for Business Sustainability: http://nbs.net/knowledge/how-environmental-management-
systems-add-value-to-firms/
D

Rusli, K. A., Abd Rahman, A., & Ho, J. A. 2012. Green supply chain management in developing
countries: a study of factors and practices in Malaysia. In: UMT 11th International Annual Symposium
TE

on Sustainability Science and Management, 9-11 July 2012, Terengganu, Malaysia. (pp. 278-285)
Salkind, N. 2009. Exploring research (7 ed.). Upper Saddle River, New Jersey: Pearson Education Inc.
Sarkis, J. 2003. A strategic decision framework for green supply chain management. Journal of Cleaner
Production, 11, 397–409.
EP

Scur, G., & Barbosa, M. E. 2017. Green supply chain management practices: multiple case studies in the
Brazilian home appliance industry. Journal of Cleaner Production, 141, 1293-1302.
Sekaran, U. 2003. Research Methods for Business: A skill Building Approach. Singapore: John Willey &
C

Sons, Inc.
Shang, K. -C., Lu, C. -S., & Li, S. 2010. A taxonomy of green supply chain management capability
AC

among electronics-related manufacturing firms in Taiwan. Journal Environmental Management 91,

1218-1226.
Sharma, S., & Vredenburg, H. 1998. Proactive corporate environmental strategy and the development of
competitively valuable organizational capabilities. Strategic Management Journal, 19(8), 729-753.
Sharma, V. K., Chandna, P., & Bhardwaj, A. 2017. Green supply chain management related performance
indicators in agro industry: a review. Journal of Cleaner Production, 141, 1194-1208.
Skjøndal Bar, E. 2015. A case study of obstacles and enablers for green innovation within the fish
processing equipment industry. Journal of Cleaner Production, 90, 234-243.
Srategy, O. I. 2009. Innovation in Firms. A microeconomic Perspective. OECD publishing.
Srivastava, S. K. 2007. Green supply‐chain management: a state‐of‐the‐art literature review. International
Journal of Management Reviews, 9, 53-80.

28
 ACCEPTED
Sroufe, R. 2003. Effects of environmental MANUSCRIPT
management systems on environmental management practices
and operations. Production and Operations Management, 12(3), 416-31.
Teixeira, A. A., Jabbour, C. J. C., de Sousa Jabbour, A. B. L., Latan, H., & de Oliveira, J. H. C. 2016.
Green training and green supply chain management: evidence from Brazilian firms. Journal of Cleaner
Production, 116, 170-176.
Trading Economics. 2016. Malaysia GDP Annual Growth Rate 2000-2015. Retrieved February 8, 2016,
from http://www.tradingeconomics.com/malaysia/gdp-growth-annual
Tramarico, C. L., Salomon, V. A. P., & Marins, F. A. S. 2017. Multi-criteria assessment of the benefits of
a supply chain management training considering green issues. Journal of Cleaner Production, 142, Part
1, 249-256.
Tseng, M. -L., Wang, R., Chiu, A. S. F., Geng, Y., & Lin, Y. H. 2013. Improving performance of green

PT
innovation practices under uncertainty. Journal of Cleaner Production, 40, 71-82.
Tsoulfas, G., & Pappis, C. 2006. Environmental principles applicable to supply. Journal of Cleaner
Production, 14, 1593-1602.

RI
UNDP Report. 2007. Energy and poverty in Malaysia (Challenges and the way Forward). UNDP
Regional Centre in Bangkok. Bangkok, Thailand: Regional Energy Programme for Poverty Reduction.
Van den Berg, U., Labuschagne, J. -P., & Van den Berg, H. 2013. The effects of greening the supplier

SC
and innovation on environmental performance and competitive advantage. Journal of Transport and
Supply Chain Management, 7, 1-7.
Walz, R., & Eichhammer, W. 2012. Benchmarking green innovation. Mineral Economics, 24, 79-101.
Weng, H. -H., Chen, J. -S., & Chen, P. -C. 2015. Effects of green innovation on environmental and

U
corporate performance: a stakeholder perspective. Sustainability, 7, 4997-5026.
AN
Wilkerson, T. 2005. Can one green deliver another? Harvard Business School Publishing Corporation.
Retrieved January 10, 2012, Brighton, Boston, Massachusetts, U.S.
Wisner, J. D., Tan, K.-C., Leong, G. K. 2014. Principles of supply chain management: a balanced
approach. Cengage Learning, Mason, OH 45040, USA.
M

Xing, K., Qian, W., & Zaman, A. U. 2016. Development of a cloud-based platform for footprint
assessment in green supply chain management. Journal of Cleaner Production, 139, 191-203.
Zailani, S., Govindan, K., Iranmanesh, M., Shaharudin, M. R., & Sia Chong, Y. 2015. Green innovation
D

adoption in automotive supply chain: the Malaysian case. Journal of Cleaner Production, 108, Part A,
1115-1122.
TE

Zhao, X., Lynch, J. G., Jr, & Chen, Q. 2010. Reconsidering Baron and Kenny: Myths and truths about
mediation analysis. Journal of Consumer Research, 37, 197–206.
Zhu, Q., Feng, Y., & Choi, S. -B. 2016. The role of customer relational governance in environmental and
economic performance improvement through green supply chain management. Journal of Cleaner
EP

Production. 155, Part 2, 46-53.

Zhu, Q., Geng, Y., Fujita, T., & Hashimoto, S. 2010. Green supply chain management in leading
manufacturers: case studies in Japanese large companies. Management Research Review, 33(4), 380-
C

392.
Zhu, Q., Sarkis, J., & Geng, Y. 2005. Green supply chain management in China: pressures, practices and
AC

performance. International Journal of Operations & Production Management, 25(5), 449-468.

Zhu, Q., Sarkis, J., & Lai, K. 2007a. Initiatives and outcomes of green supply chain management
implementation by Chinese manufacturers. Journal of Environmental Management, 85, 179-189.
Zhu, Q., Sarkis, J., & Lai, K. 2007b. Green supply chain management: pressures, practices and
performance within the Chinese automobile industry. Journal of Cleaner Production, 15(11-12), 1041-
1052.
Zhu, Q., Sarkis, J., Lai, K. -h. 2008a. Green supply chain management implications for “closing the
loop”. Transportation Research Part E: Logistics and Transportation Review, 44, 1-18.
Zhu, Q., Sarkis, J., & Lai, K. 2008b. Confirmation of a measurement model for green supply chain
management practices implementation. International Journal of Production Economics, 111(2), 261-
73.

29
Zhu, Q., Sarkis, J., & Lai, K. 2011. ACCEPTED MANUSCRIPT
An institutional theoretic investigation on the links between
internationalization of Chinese manufacturers and their environmental supply chain management.
Resources, Conservation and Recycling, 55, 623-630.
Zhu, Q., & Sarkis, J. 2004. Relationships between operational practices and performance among early
adopters of green supply chain management practices in Chinese manufacturing enterprises. Journal of
Operations Management, 22, 265-289.
Zhu, Q., & Sarkis, J. 2006. An inter-sectoral comparison of green supply chain management in China:
Drivers and practices. Journal of Cleaner Production, 14(5), 472-86.
Zhu, Q., & Sarkis, J. 2016. Green marketing and consumerism as social change in China: analyzing the
literature. International Journal of Production Economics, 181, Part B, 289-302.
Zsidisin, G., & Siferd, S. 2001. Environmental purchasing: a framework for theory development.

PT
European Journal of Purchasing & Supply Management, 7(1), 61-73.

RI
U SC
AN
M
D
TE
C EP
AC

30