Professional Documents
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10 1108 - Bij 04 2020 0143
10 1108 - Bij 04 2020 0143
10 1108 - Bij 04 2020 0143
https://www.emerald.com/insight/1463-5771.htm
Imran Ali
College of Business, Central Queensland University - Melbourne Campus,
Melbourne, Australia
Abstract
Purpose – This research aims to explore the potential impacts of the Belt and Road Initiative (BRI) on
sustainable supply chains.
Design/methodology/approach – This study employs twenty qualitative interviews with supply chain
managers located on the BRI lane from Asian countries.
Findings – Findings revealed that if not managed properly, BRI can pose a serious threats to sustainable
supply chains from environmental perspective. The findings also revealed additional properties which lead to
the emergence of these perspective.
Research limitations/implications – The findings of this study may not be generalizable to a broader
population. Second, this study explores supply chain managers’ interpretations from Asian countries only.
Practical implications – Supply chain firms can use the findings from this study to understand the
implications of BRI for sustainable supply chains. Particularly, firms can understand how the BRI may harm
the organization’s sustainable supply chains from the environmental perspective.
Originality/value – This is, perhaps, the first study which provides empirical evidence concerning the
potential impacts of BRI on the management of sustainable supply chains.
Keywords Belt and road initiative, Qualitative research, Product quality, Sustainable supply chains
Paper type Research paper
1. Introduction
Management of global supply chains has been the subject of much attention in the past
decade (Mentzer et al., 2001; Ponomarov and Holcomb, 2009; Scholten et al., 2014; Stock et al.,
2000; Tukamuhabwa et al., 2015). Many of these studies either present or discuss issues and
challenges about managing global supply chains. Furthermore, some of these studies discuss
factors that can impact the global supply chain, including the location of firms (Mentzer et al.,
2001; Ponomarov and Holcomb, 2009). Besides, an initiative taken by the President of the
People’s Republic of China, Xi Jinping in 2013 called as the “Belt and Road Initiative” (BRI)
has also received much attention from the global community (Th€ urer et al., 2020). The BRI is
one of the largest and perhaps the most ambitious infrastructure-related project undertaken
anywhere in the world, with the potential to impact the global design and management of
supply chains due to its widespread presence across at least three continents. For instance, in
2018, the trade value between China and BRI countries grew up to 8.4 trillion yuan. The BRI
was officially announced in 2013 as a part of China’s President’s visit to Kazakhstan and
Indonesia (Huang, 2016; Sarvari and Szeidovitz, 2016; Summers, 2016; Chen et al., 2013, 2017). Benchmarking: An International
Journal
The basic purpose behind this initiative was to combine the “Silk Road Economic Belt,” a © Emerald Publishing Limited
1463-5771
wide network of transportation and communication infrastructure through the route of DOI 10.1108/BIJ-04-2020-0143
BIJ central Asia – the Belt – with the “21st Century Maritime Silk Road” (Howard and Howard,
2016). Combining these two roads will connect Chinese ports with Southeast Asia (Pakistan,
India, Bangladesh and Cambodia), Africa, the Middle East and Europe. The BRI aims at
developing a giant and mega infrastructure project on a large scale that will connect ports
across and within different continents, thereby linking the Silk Road Economic Belt with the
21st Century Maritime Silk Road (Th€ urer et al., 2020).
Moreover, it has received a great deal of political and financial support from the
stakeholders (partnering countries) since the BRI was founded. For example, China issued an
official statement on the concept of the BRI at the end of 2015 with 56 partner countries and
regional cooperation and also signed a memorandum of understanding with them (Cheng and
Yang, 2018). By 2019, nearly 38 mega-transport infrastructure projects had been built by
Chinese companies in more than 26 partner countries along the BRI route, with a total
investment of over 52 bn U.S. dollars (Chongyang Institute for Financial Studies, Renmin
University of China, 2016). It also means that the BRI is a concept that encompasses a variety
of projects and approaches, and with a broad goal in mind, the Chinese Government initiated
the project.
While the BRI has been the subject of little research in disciplines including political
sciences and economics (Blanchard and Flint, 2017; Blanchard, 2017; Thuan, 2017), its
application to the supply chain domain is rather scant. In particular, little evidence exists
about how the BRI can affect the environmental aspects of supply chain components. Supply
chain sustainability (SCS) is a holistic view of supply chain operations, logistics and
technologies affecting the components of a supply chain’s environmental, social, economic
and legal aspects (Ali and G€olgeci (2019)). Sustainability initiatives typically include
identifying the source of raw materials, ensuring good working conditions and reducing the
carbon footprint (Cheng and Yang, 2018). This paper argues that the BRI can have a negative
impact on sustainable supply chains from the environmental perspective. For instance,
Zhang et al. (2017) argued that the BRI may require the use of excessive raw material as it is a
large-scale infrastructure project. This study further notes that such excessive use of raw
materials may affect the environment. On the other hand, Zhoe et al. (2018) and Cheng and
Yang (2018) noted that the BRI is a large-scale manufacturing project which can negatively
affect the climate through pollution. Also, Du and Shi (20170 and Zhoe et al. (2018) contended
that the BRI can also result in the higher generation of waste through emissions, air pollution
and solid waste, etc. as it is going to build many production facilities along the BRI lane.
Thuan (2017) also argued that the BRI may impact the environmental practices as there are
many entities involved in this project and they might not be able to fully comply with the
environmental standards. While these studies do provide some possible implications of how
the BRI may impact sustainable supply chains, there is no empirical evidence to validate
these claims. Although China itself has hundreds of expert centers specialized in BRI-related
problems, most of these are embedded in international law, political science, the economy and
social science (Kolosov et al., 2017). Thus, the potential impact of how the BRI may impact the
environmental supply chains has been largely overlooked. Furthermore, the global
significance of the BRI means that this is a topic that warrants greater attention from
supply chain management researchers and practitioners both within and outside of China.
Therefore, the purpose of this study is to explore the implications of BRI on sustainable
supply chains from the environmental perspective. The following research question is
developed to guide this study: How does BRI affect the sustainable supply chains from the
environmental perspective?
Our study contributes to sustainable supply chain literature within the context of the BRI
in the following ways. First, our study presents implications of the BRI on the sustainable
supply chain. Perhaps, this is the first and only study to conduct empirical work on the role of
the BRI on sustainable supply chain management literature. Second, this study contributes to
theory by exploring the full potential of the BRI by studying its implication from the supply BRI and
chain management perspective besides other disciplines such as political science and sustainable
economics. Third, our study contributes to practice by providing some helpful guidelines to
firms on how to deal with challenges affecting environmental, supply chains. Such guidelines
supply chains
can also help a firm in developing effective policies and practices which can help firms in
reducing the negative environmental impact of BRI on sustainable supply chains.
The rest of the paper is structured as follows: first, limited literature on sustainable supply
chain management within the context of the BRI is reviewed. Following this, steps taken to
conduct the qualitative methodology are elaborated on including the sample, sampling, data
collection and analysis and trustworthiness of research findings. Moving on, results are
presented and discussed within the contextualization of extant literature. Finally, the
theoretical and practical implications of the study are articulated along with limitations and
future research direction on this emerging topic area.
2. Literature review
2.1 Defining sustainable supply chains
Supply chain is defined as a set of three or more entities (organizations or individuals) directly
involved in the upstream and downstream flows of products, services, finance and
information from source to consumer and vice versa (Mentzer et al., 2001). From this point of
view, a supply chain can be envisaged with two components: individuals and flows. The
location decisions where the various supply chain actors (and operations) are located is an
important decision in terms of supply chain management entities. Sustainability is the
concept of fulfilling current market needs while taking into account the ability to meet
potential demands (Hassini et al., 2012; Jaehn, 2016). Sustainability embraces environmental,
social and economic performance as a triple bottom line concept (Huang et al., 2013). Since the
early 2000s, researchers have repeatedly mentioned the need to integrate the three
sustainability dimensions into supply chain management (Rajeev et al., 2017). Businesses and
researchers have come to view sustainability as an essential tool for long-term risk reduction,
energy depletion and digression and pollution and product liabilities (Manning and Soon,
2016). From sustainable supply chain management’s 12 definitions (Ahi and Searcy, 2013), it
was concluded that sustainable supply chain management is a combination of key elements
of business sustainability and features of supply chain management. In light of its potential to
improve global environmental sustainability without compromising business productivity,
supply chain management has attracted the focus of practitioners and researchers (Acquaye
et al., 2017). Sustainability is the main focus of industries and their stakeholders, thus
embedding it in the basic levels of their planning and operations (Chen et al., 2017).
3. Methodology
The study was designed to be qualitative. Qualitative research is the process of
understanding the unique humanistic perception of a given situation and interpreting this
understanding to create a holistic picture within the naturalistic setting (Creswell, 2013).
Qualitative research is also used to provide detailed research into the how, what, when and
where, identify the relationships among individuals or entities and aid the development of
future hypotheses or research questions surrounding the phenomena (Zikmund, 1997). The
BRI has been the subject of investigation in disciplines such as political science and
economics. However, its application to the supply chain domain is very limited. Specifically,
empirical studies concerning the implication of the BRI on global supply chain management
are nonexistent. This gives support for the adoption of qualitative research design because
qualitative research offers an opportunity to transcend the shortcomings of existing
explanations (Weick, 2007; Yin, 2009). In addition, this qualitative study relies on a
phenomenological method. A phenomenological inquiry “is an attempt to deal with inner
experiences unprobed in everyday life” (Merriam, 2007, p. 7). The research study chose this
method to help identify the meaning behind the human experience as it related to a BRI and
phenomenon or notable collective occurrences (Creswell, 2013). sustainable
supply chains
3.1 Sample and sampling
Overall, 20 semi-structured interviews with senior managers from three supplying firms, two
transporters and two buying firms participating in the BRI were conducted. The
transportation sector was chosen because the BRI is essentially a transport infrastructure
initiative with potentially significant implications for global supply chains. The participating
firms were based in Pakistan, Bangladesh, China and Sri Lanka. A total of three supplying
firms were based in Pakistan, providing cement and steel products. At the same time, two
transportation centers were located in Sri Lanka and Bangladesh, mainly engaged in cargo
and freight handling. Finally, the buying firms were located in Mainland China, constructing
road and rail networks. Also, the senior managers interviewed in this study were designated
at different positions such as operations manager and procurement manager. Further details
pertaining to the profile of companies and interviewees are provided in Table 1. To begin the
sampling process, an email providing comprehensive information pertaining to the purpose
and objectives of the study was sent to each participant well ahead before interviews.
Furthermore, we relied on purposive and snowball sampling to recruit participants in this
study. To begin with, we used the one-industry platform to explain the objectives of the
research study and further exchanged contact information with the senior managers. Then,
the knowledgeable respondents were selected by using purposive sampling to begin the
interview process; a snowball sampling technique was used to continue to collect data as it
was very hard to locate participants on the phenomenon of interest. To sum up, the first
manager affected by the BRI was selected using purposive sampling. At the end of the
interview, these managers were asked to facilitate contact with another manager (snowball
sampling), whom they believe has been affected by the BRI and was in a position to provide
further information pertaining to impacts of the BRI on SCS.
Hsu (2016) This study addressed issues such as innovative product development modes and also
provided constructive suggestions for its application in the manufacturing sector
Bao and Ma (2017) This article articulates key decisions considered during the development of the product
and its quality in parallel supply chains. It further sheds light on where two
manufacturers produce replacement products and then sell them to the downstream
retailers
Chen et al. (2017) This study develops a model based on game theory to analyze the competition between
two freight distribution modes specifically. It also uses strategic interaction methods that
are competitive and by considering the most cost-effective scale of the transportation
capacity
Du and Shi (2017) The paper uses dynamic games of incomplete information to analyze the game behavior
between the government and the local companies of the China Railway Express to study
whether the government subsidy policy is beneficial to the operation of the latter
Gallo et al. (2017) This paper develops a combined integer linear programming model intending to
minimize the total energy consumption in the cold supply chain of perishable products
Lee and Cho (2017) This article’s objective is to derive the final and optimal number of ports in a specific
scenario where ports are transshipping domestic cargos
Lin (2017) The paper focuses on developing a novel decision model for green supplier selection in
the BRI through a fuzzy-weighted average approach with social media
Zhang (2017) This study proposes an improved logistics path through the use of a selective algorithm
Chen and Yang The study addresses a port cluster problem that considers industry transfer and the
(2018) capacity constraints along the 21st Maritime Silk Road
Table 1. Ruan et al. (2019) The study proposes a concept of port service network that consists of a large hub and
Review of key multiple ports. Ports of small and medium sizes can share their capacities of different
literature on supply types of port service with the hub
chain management in Zhao et al. (2018) The study redesigns the supply chain of agricultural products in southwest China under
the context of the Belt the BRI to improve its eco-efficiency by considering the associated agro-wastes flowing
and Road Initiative into bioenergy enterprises for energy production
(2) Transferability: various participants were selected to represent variations in the type
of positions, responsibilities and regions. In addition, this study provides all
information including organizations, number and type of participants, data collection
process and interview period;
(3) Dependability: the codes developed for the same transcripts were compared with the
codes developed by the other researchers. With 83% similarity, the inter-coder
comparison was found satisfactory;
(4) Conformity: the findings were supported by quotes, periodic data review and
analytical procedures to avoid judgmental bias.
4. Findings
Respondents' narratives reveal that the BRI will result in excessive use of raw material,
higher generation of waste. Respondents' stories also stated that BRI would make it
challenging for firms to meet the environmental standards and to make responsible use of
green financing. These themes are discussed below in Sections 4.1.1, 4.1.2, and 4.1.3.
5. Discussion
5.1 Implications for theory and practice
While extant literature sheds some light on the role of the BRI within supply chain domain
(Hsu, 2016; Bao and Ma, 2017; Chen et al., 2017; Du and Shi, 2017; Gallo et al., 2017; Lee and
Cho, 2017; Hu et al., 2017; Hu, 2017), however, these studies use the BRI as a context only for
work conducted on other topics, and there is no empirical evidence about how the BRI can
impact the organization’s environmental supply chains. Indeed, the BRI is a megaproject
and unique phenomenon of this time, which is indeed worthy of observation and demands
empirical work specifically concerning the implication of the BRI on sustainable supply
chain management. Therefore, perhaps, this is the first study that provides empirical
evidence on the impact of the BRI on sustainable supply chains. In particular, our results
reveal that BRI has the potential to affect the environment through higher pollution (higher
gas emissions, water pollutants etc.), and excessive use of raw material. It will also affect the
way firms will manage their environmental standards as well as the effective use of green
financing. This should be of particular interest for firms located in remote areas as well as
SMEs in developing economies as they are already struggling to cope up with the expected
standards. Furthermore, while it is true that the BRI has experts working round the clock in
finding and solving problems that could emerge as a result of executing the BRI across
countries, most of them are unfortunately only looking at the problems from the lens of law,
economics, political and social sciences. Consequently, the full potential of the BRI on
supply chain management remains unexplored (Th€ urer et al., 2020). Our study, thus,
provides a much deeper and enhanced understanding of the implications that can emerge
for sustainable supply chain management as a result of the BRI not only from the context of
political and socioeconomic factors but also from the perspective of logistics and supply
chain management.
As the BRI expands established supply chains or even creates new ones, new
opportunities and challenges can be found. First, as stated earlier, the purpose of the BRI
is to allow increased freight via air, rail and maritime modes of transport. While all modes of
transport are encouraged, rail has become the most associated form of transport to the BRI.
Furthermore, rail’s advantage is that it is considered considerably cheaper than air and
quicker than the sea. The extension of logistics routes and the changing modes of transport
could likely affect the way businesses want to transport their goods. Consequently, the
environmental effect will derive from the decisions that businesses make about those
changes. If the net result is for businesses to prefer rail transport over air travel, then it may
have significant environmental effects. These findings are in agreement with extant literature
on the sustainable supply chains from an environmental perspective (Th€ urer et al., 2020).
Nevertheless, if rail transport balances other modes of transport (maritime), it could be
perceived as having a negative climate effect. Second, with strengthened transport links and
more bilateral trade agreements signed between China and third-party countries, this study
BIJ claims that Chinese companies are seeing increasingly favorable conditions for relocating
manufacturing facilities and logistics hubs to more low-cost regions. This trend has been
highlighted among multinationals establishing logistics hubs and finding suppliers along the
BRI lane. Establishing new logistics hubs in low-cost regions could, on the one hand, help to
incorporate these into global supply chains and boost economic growth, but it could also help
to leverage the lower environmental standards. These findings are in agreement with extant
literature on the BRI within the context of supply chain management, suggesting that the BRI
will boost economic growth and help firms overcome lower environmental standards (Chen
et al., 2017). Our results also highlight that the BRI will make it extremely challenging for
firms to adhere to the environmental assessments and firms which will not be able to fully
comply with the environmental assessments will be put under greater scrutiny to implement
such requirements to meet the standards of the environment. Our results provide empirical
support to a recent study on the role of the BRI in sustainable supply chains (Hsu et al., 2016).
In addition, there will be many non-Chinese banks which will have a hard time securing
financing options to support the projects which come under the umbrella of the BRI, as results
suggest that banks operating outside China are not very much flexible in terms of meeting
internal compliance and control systems. Finally, our results indicate that non-Chinese banks
would struggle to secure better financing schemes either to initiate or continue with different
BRI-related projects, and Chinese banks would continue to dominate due to ease of restriction
for them. The findings once again provide empirical support to the sustainable supply chain
literature within the context of the BRI. For instance, Zheng et al. (2017) argued that non-
Chinese banks will struggle to cope with sufficient environmental standards due to the least
access to sufficient financing.
Firms will encounter difficulties in searching for new partners, and the problems for firms
would be linked to identifying and working with new suppliers and partners. Furthermore,
firms should develop relationships with suppliers which can meet international production
standards. We also suggest firms to try to avoid working with suppliers based in remote
areas as firms may struggle to monitor their work process. In order to make the environment
more sustainable, businesses should maintain a commitment to a strict code of conduct and
implement high standards of CSR while developing operations in new regions and nations.
The net result would depend on the company’s standards, internally that would be in terms of
due diligence before third-party operations are developed and an existing code of conduct is
implemented. Outside, this would mean adhering to greater global openness, tightening
international standards and rising demands in the market. As observed from results, while
discussing the on-the-ground implementation of BRI projects, sustainability aspects are
emphasized as problematic. This study presented a few cases concerning the environmental
issues that arose in the context of BRI projects. Firms would also need to hold a strong official
commitment to sustainable development, especially for the environment and a local
environment that can be ridden with environmental risks. We also advise firms to take both a
holistic and practical business approach about the BRI, taking into account the implications
of the initiative from the aspect of changing supply chains in the region. Through this aspect,
the BRI can be seen as having an impact on firms and careful review should be carried out to
adapt or even influence new market conditions.
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Appendix A
Interview guide
Thank you very much indeed for participating in this study. We are conducting a study on the possible
implications of the BRI on sustainable supply chains. We know that you are an expert in this area and,
therefore, we would like to interview you. Please note that there are no right and wrong answers, and our
sole intention is just to learn from your experience.
BIJ (1) What does the BRI mean to you?
(2) What do you think are the benefits attributed to supply chains while being a part of the BRI?
(3) What are some of the challenges that supply chains can face while being a part of the BRI?
(4) What your firm has done so far to address the issue of sustainability?
Thank you very much, indeed, for your time. As soon as we are done with data collection and the
analysis, we will update you. Meanwhile, if you have any questions, then please do not hesitate to contact
us.
Corresponding author
Atif Saleem Butt can be contacted at: atifbutt10@hotmail.com
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