Journal of Cleaner Production 414 (2023) 137502

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Journal of Cleaner Production

journal homepage: www.elsevier.com/locate/jclepro

Green supply chain management and firm sustainable performance: The

awareness of China Pakistan Economic Corridor
Haseeb Ur Rahman a, *, Muhammad Zahid b, c, Mehran Ullah d,
Mamdouh Abdulaziz Saleh Al-Faryan e, f
a
Interdisciplinary Research Center for Finance and Digital Economy, King Fahd University of Petroleum and Minerals, Dhahran, 31261, Saudi Arabia
b
Department of Management Sciences, City University of Science and Information Technology, Peshawar, Khyber Pakhtunkhwa, Pakistan
c
Postdoctoral Fellow, Faculty of hospitality, Tourism and Wellness, Universiti Malaysia Kelantan, 16100, City Campus, Malaysia
d
Interdisciplinary Research Center for Smart Mobility & Logistics, King Fahd University of Petroleum and Minerals, Dhahran, 31261, Saudi Arabia
e
School of Accounting, Economics and Finance, Faculty of Business and Law, University of Portsmouth, Portsmouth, UK
f
Consultant in Economics and Finance, Riyadh, Saudi Arabia

A R T I C L E I N F O A B S T R A C T

Handling Editor: Cecilia Maria Villas Bôas de This study examines the impact of four main dimensions of Green Supply Chain Management (GSCM) i.e., In­
Almeida ternal Environmental Management (IEM), Green Purchasing (GP), Eco-design (ED), and Collaboration with
Suppliers and Customers (CSC) on firms’ Sustainable Performance (SP) - (environmental, social, and economic).
Keywords: The study collected data through an adopted structured questionnaire from 190 respondents of the
Green supply chain management (GSCM)
manufacturing firms located in the Khyber Pakhtunkhwa (KP) province of Pakistan. By employing Structural
Sustainable performance
Equation Modelling (SEM) through SmartPLS, it is revealed that IEM, GP, and ED have a significant positive
China-Pakistan Economic Corridor (CPEC)
Pakistan while CSC has an insignificant positive impact on firms’ SP. By dividing the sample into China-Pakistan Eco­
nomic Corridor (CPEC) aware and unaware groups, it is confirmed that IEM, GP, and ED have a significant
positive while CSC has an insignificant association with firms’ SP in the former group only as none of the other
GSCM dimensions, except the significant positive coefficient of GP, has any significant relationship with firms’ SP
in the latter group. Besides enriching the literature, especially by exploring the role of CPEC awareness, the study
also contributes to the theory by testing the assumptions of the rarely examined stakeholder salience theory in
the nexus of GSCM-SP. The study also contributes to the practice by updating all the key stakeholders including
the local industry, government, and CPEC authority that GSCM (IEM, GP, and ED) is a comprehensive and
effective strategy for boosting firms’ SP and CPEC influencing their association positively.

1. Introduction
Global supply chains account for more than 80% of firms’ green­
house gas emissions and 90% of their overall negative effects on air,
land, water, biodiversity, and geological resources (Bové and Swartz,
2016). Similarly, half of the global packaging market having an
approximate value of 475 billion USD (United States Dollars) is also
believed to be reusable (Reusable Packaging Association, 2020).
Together, these bring firms under tremendous pressure to reduce
emissions, toxic pollution, and chemical spills by adopting green and
environment-friendly practices, especially in their supply chain activ­
ities (Amjad et al., 2022; Rahman et al., 2021a, 2021b; 2023; Roh et al.,
2022). To this end, Green Supply Chain Management (GSCM) assists
firms in improving their Sustainable Performance (SP) - (environmental,
social, and economic performance) in all their upstream and down­
stream supply chain activities - from buying raw materials to the
disposal of the product (Antawi et al., 2022; Darwish et al., 2021; Roh
et al., 2022; Tseng et al., 2020). GSCM encourages firms to purchase and
use eco-friendly materials, efficient transportation, and cleaner energies
in all phases of products’ life cycle. Also, it aims to decrease the negative
effects of firms’ activities on the society and environment by reducing
resource consumption, waste, emissions, and pollution which have
positive implications for their SP (Amjad et al., 2022; Antawi et al.,
2022; Iddrisu, 2022; Mishra et al., 2022). By focusing on GSCM,

* Corresponding author. Interdisciplinary Research Center for Finance and Digital Economy, King Fahd University of Petroleum and Minerals, Dhahran, 31261,
Saudi Arabia.
E-mail address: drhaseeb@ustb.edu.pk (H.U. Rahman).

https://doi.org/10.1016/j.jclepro.2023.137502
Received 4 September 2022; Received in revised form 17 February 2023; Accepted 15 May 2023
Available online 23 May 2023
0959-6526/© 2023 Published by Elsevier Ltd.
H.U. Rahman et al.
Interface Inc. started a mission known as “mission zero” in 1994 that
reduced its carbon footprint by 74%, converted 75% of its energy use to
renewable sources, including 100% renewable electricity, and increased
its use of recycled or bio-based materials to 60% in 2019 (UNCC, 2023).
To probe the empirical evidence for the relationship between GSCM and
firms’ SP, this study searched the keywords of “supply chain manage­
ment”, “green supply chain management”, “corporate social re­
sponsibility” and “sustainable performance” on “Scopus” database and
found that 266 studies were published from 1998 to 2023. The review of
the searched literature revealed that the majority of earlier researchers
focused on supply chain management (SCM) instead of GSCM, and the
studies investigating the impact of GSCM on firms’ SP are fewer than
those inquiring about its antecedents (Afum et al., 2021; Rizki and Au­
gustine, 2022; Roh et al., 2022). By excluding these studies not directly
related to the inquiry at hand, we were left with 143 studies probing the
relationship of different dimensions of GSCM with the environmental,
social, economic, operational, and financial performance of the firms
(some of these studies are reported in Appendix 1). The review of these
studies further revealed that most of the researchers using SP as an
outcome variable of GSCM either focused on its environmental
(Abdallah & Al-ghwayeen, 2020; Cousins et al., 2019; Eltayeb et al.,
2011; Fianko et al., 2021; García Alcaraz et al., 2022; Laari et al., 2018;
Le, 2020; Namagembe et al., 2019; Nguyen et al., 2021; Pinto, 2020; Zhu
and Sarkis, 2004) or economic dimensions (Akhtar, 2019; Cousins et al.,
2019; Eltayeb et al., 2011; Laari et al., 2018; Namagembe et al., 2019;
Pinto, 2020; Zhu and Sarkis, 2004) and only a few of them considered
the social aspect as well (Han and Huo, 2020; Le, 2020; H. Younis et al.,
2016; Younis et al., 2019; Zhu et al., 2007). Furthermore, the review of
prior literature also disclosed the positive (Green et al., 2012; Rao and
Holt, 2005; Rehman Khan and Yu, 2021; Zhu and Sarkis, 2004), negative
(Eltayeb et al., 2011; Pinto, 2020), and no relationship between GSCM
and SP (Ahmed et al., 2020; Laosirihongthong and Tan, 2013). The
inconsistency in the findings of the previous studies may be due to the
difference in their samples, time frames, methods, or contexts (Wang
and Clift, 2009; Rahman and Zahid, 2021).
The disagreement in findings may also be an outcome of using
different dimensions of GSCM in the previous studies (Chu et al., 2017;
Iddrisu, 2022; Namagembe et al., 2019; Rizki and Augustine, 2022; Roh
et al., 2022). GSCM being a broad construct has numerous dimensions as
used and investigated by the previous studies (see Appendix 1). Pinto
(2020) asserted that GSCM evolved over the years and therefore, it has
no universal, clear, or agreed-upon dimensions or practices. Many other
authors also concluded that there is no-to-low agreement on GSCM di­
mensions as these vary with the firm size, industry type, and country -
developing or developed (Al-Ghwayeen and Abdallah, 2018; Balon,
2020; Tseng et al., 2019). Thus, this study selects the four most impor­
tant dimensions of GSCM namely Internal Environmental Management
(IEM), Green Purchasing (GP), Eco-design (ED), and Collaboration with
Suppliers and Customers (CSC) like Al-Ghwayeen and Abdallah (2018),
and Abdallah and Al-ghwayeen (2020). The selection is logical, as the
sample of the current study is somehow compatible with both the
aforementioned studies using the data of manufacturing firms of a
developing country - Jordan. Besides minimizing the direct and indirect
negative effects of the supply chain activities effectively, the selected
four dimensions of GSCM have also been widely used and discussed by
the previous studies with a rationale of covering both the internal (IEM,
and ED) and external (GP and CSC) aspects of GSCM (Rao, 2002; Younis
et al., 2019; Abdallah and Al-ghwayeen, 2020). Furthermore, the
selected GSCM dimensions are considered the most important; thereby,
commonly practiced by the manufacturing firms of both developed and
developing countries (Al-Ghwayeen and Abdallah, 2018). The selected
dimensions are also believed to have positive consequences for the
image and competitive advantage of the organizations (Cosimato and
Troisi, 2015). For instance, IEM not only determines firms’ different
ecological targets and standards but also assists them in the judicious
allocation of resources and the development as well as the
2
Journal of Cleaner Production 414 (2023) 137502
implementation of strategies for their successful accomplishment
(Amjad et al., 2022; Zhu et al., 2008). Likewise, GP discourages firms’
purchase and use of toxic materials and filthy energies by supporting
their replacement with clean and less hazardous alternatives. It also
encourages firms to push suppliers for green and cleaner production
having no-to-low negative effects on the society and environment
(Amjad et al., 2022; Elyasi and Teimoury, 2023; Iddrisu, 2022; Nama­
gembe et al., 2019). Similarly, ED aims to enhance the quality and
ecological efficiency of the products. Besides encouraging the biode­
gradability and recyclability of the products, ED also requires a decrease
in resource consumption, waste, emissions, and pollution during the
manufacturing process (Amjad et al., 2022; Zhu et al., 2008). Firms’
collaboration with suppliers assists them in GP while their collaboration
with customers updates them about the buyers’ environmental sensi­
tivity (Amjad et al., 2022; Mishra et al., 2022; Namagembe et al., 2019;
Vachon and Klassen, 2008).
To sum up, this study examines the impact of four important di­
mensions of GSCM namely IEM, GP, ED, and CSC on firms’ SP covering
their environmental, social, and economic performance in a developing
country like Pakistan. The context of Pakistan is important for having
only four studies on the GSCM-SP nexus which also overlooked the so­
cial dimension of SP as illustrated in Appendix 1 (Ahmed et al., 2020;
Akhtar, 2019; Junaid et al., 2022; Rehman Khan and Yu, 2021). In
addition, the study also explores the rarely examined role of
China-Pakistan Economic Corridor (CPEC) awareness in the nexus of
GSCM and SP. CPEC is expected to attract international organizations
and investors which may enrich GSCM of the local firms by increasing
their awareness, motivation, and capacity for SP. The local firms may
also fortify GSCM to maximize returns from CPEC projects by increasing
their acceptability for international firms, investors, and customers (Ali
et al., 2018; Blanchard, 2018). Nevertheless, the prior few studies in
Pakistan could not pay attention to the potential role of CPEC in the
GSCM-SP nexus (Ahmed et al., 2020; Akhtar, 2019; Junaid et al., 2022;
Rehman Khan and Yu, 2021). The study uses data collected through an
adopted structured questionnaire from 190 managers of manufacturing
firms located in the province of Khyber Pakhtunkhwa (KP), Pakistan.
The study contributes to the existing body of knowledge and practice
by investigating the impact of four main dimensions of GCSM (IEM, GP,
ED, and CSC) on firms’ SP (environmental, social, and economic) in a
developing country like Pakistan where research in the area is still
nascent (Amjad et al., 2022). The context of the study is important as the
findings of inquiries carried out in other countries cannot be generalized
or applied to Pakistan due to their context-dependent nature (Afum
et al., 2021; Antawi et al., 2022; Iddrisu, 2022). In addition, the study
contributes to the literature and policy by exploring the potential role of
CPEC awareness in the nexus of GSCM and SP, which has rarely been
examined in the past. Furthermore, the study also contributes to the
theory by testing the postulations of both the stakeholder and stake­
holder salience theories simultaneously where the latter has rarely been
employed in prior GSCM-SP-related studies. The study also contributes
to methodology, especially by using Multigroup Analysis (MGA), which
has less frequently been used by previous studies. Besides, the study also
contributes to the practice by providing many important empirical in­
sights for all the key stakeholders as discussed in the practical and
managerial implications of the study. The remaining of the study is
organized as the following sections present the literature review,
research design, and data analysis while the next section reports results
before discussing findings and conclusions in the last sections of the
study.
2. Literature review
2.1. Theoretical background
The stakeholder theory assumes that firms should cater to the
legitimate interests of all stakeholders, including the environment and
H.U. Rahman et al.
society. The theory assumes that firms are ethically and morally liable to
develop and implement proactive environmental strategies like GSCM
for reducing emissions, pollution, and other environmental hazards
(Donaldson and Preston, 1995; Freeman, 1984; Rahman et al., 2021a,
2023). In this regard, the activism of stakeholders, especially those who
are more important, plays an effective role in pushing firms toward
sustainability. As per stakeholder salience theory, the importance of
stakeholders is determined by their “power”, “legitimacy”, and “ur­
gency”. The “power” is referred to the stakeholders’ pressure forcing
firms to do things for which they are not willing (Mitchell et al., 1997) as
endorsed by the neo-institutional theory that “coercive pressures”
strongly influence firms’ decisions and strategies (DiMaggio and Powell,
1983). Similarly, “legitimacy” explains the authenticity and rightfulness
of the stakeholders’ demands while “urgency” reflects their expectations
for the quick solution of their legitimate claims from organizations
(Mitchell et al., 1997). Simply, the effectiveness of stakeholders’ pres­
sure largely depends upon the nature and value of their relationships
with organizations. Because, organizations pay more attention to the
stakeholders important for their legitimacy, success, and survival
(DiMaggio and Powell, 1983; Rahman et al., 2021a). Given this, CPEC is
likely to be a strong and important stakeholder possessing “power”,
“legitimacy” and “urgency” for pushing and persuading firms to take
quick and meaningful actions for social and environmental welfare.
Besides, stakeholders’ understanding and awareness of different
emerging ecological challenges also bring firms under severe public
scrutiny to promote sustainability and avoid reputational loss for
damaging the ecosystem (Sarkis, 2010; Rahman et al., 2021a). Given
that, CPEC is believed to mount pressure on the local firms for enriching
their GSCM. Furthermore, the awareness of local firms to CPEC pros­
pects is also assumed to supplement their GSCM for tapping more op­
portunities and coping with potential risks associated with CPEC
projects. To sum up, this study theorizes CPEC as an influential potential
stakeholder having the capability to augment the GSCM of the local
firms for improving their SP. This is aligned with Zhu et al. (2007) that
stakeholders’ pressure positively influences firms to adopt and enrich
GSCM for improving their economic and environmental performance.
2.2. Green supply chain management and firm sustainable performance
Corporate sustainability requires firms to create value for stake­
holders by improving SP. Also, it calls for a balanced progression on
environmental, social, and economic sustainability, as these are closely
interlinked, and overlooking any of them may affect the progress of
others (Antawi et al., 2022; Iddrisu, 2022; Rahman et al., 2021a, 2023).
To this end, GSCM is considered one of those effective strategies that
assists firms in keeping their operations aligned with environmental,
social, and economic obligations (Iddrisu, 2022; Rizki and Augustine,
2022; Roh et al., 2022). However, the findings of the prior empirical
studies are mixed (Eltayeb et al., 2011; Green et al., 2012; Laosir­
ihongthong and Tan, 2013) may be due to the difference in their sam­
ples, time frames, methods, and contexts (Wang and Clift, 2009; Rahman
and Zahid, 2021) or employed dimensions of GSCM and SP (Chu et al.,
2017; Iddrisu, 2022; Namagembe et al., 2019; Rizki and Augustine,
2022; Roh et al., 2022). Besides, Appendix 1 identified only four studies
on the nexus of GSCM and firms’ SP which also neither considered the
social dimension of SP nor paid attention to CPEC (Ahmed et al., 2020;
Akhtar, 2019; Junaid et al., 2022; Rehman Khan and Yu, 2021). Given
that, the following section synthesizes the relevant literature for hy­
pothesizing the relationship of the most important four dimensions of
GSCM namely IEM, GP, ED, and CSC with firms’ SP covering their
environmental, social, and economic performance in Pakistan. The next
section also hypothesizes the potential role of CPEC awarness in the
GSCM-SP nexus. By following the “research onion” of Saunders et al.
(2019), the study hypothesizes different relationships based on a
deductive reasoning approach that considers the conclusions true if
logically derived from a set of theory-driven premises (Ketokivi and
3
Journal of Cleaner Production 414 (2023) 137502
Mantere, 2010). The deductive approach is explained as “if your
research starts with a theory, often developed from your reading of the
academic literature, and you design a research strategy to test the the­
ory, you are using a deductive approach” (Saunders et al., 2019, p. 153).
2.3. Internal environmental management and firm sustainable
performance
Internal Environmental Management (IEM) reflects firms’ collabo­
rative culture, cross-functional cooperation, and willingness or
commitment of the top-level management for the protection of the
environment. IEM assists firms in establishing quantifiable environ­
mental targets and developing strategies for their accomplishment
(Abdallah & Al-ghwayeen, 2020; Amjad et al., 2022; Rao and Holt,
2005). Besides increasing firms’ compliance with environmental regu­
lations and legislations, IEM also encourages their investment in
total-quality environmental management programs, certifications, and
cleaner technologies (Amjad et al., 2022; Namagembe et al., 2019).
Furthermore, IEM also intends to enrich firms’ competitiveness and
environment-friendly conduct by reducing waste, emissions, and
pollution in all their activities and operations, including the purchase of
raw materials, manufacturing, assembling, packaging, distribution or
delivery, and disposal of the products. Many empirical studies
concluded that IEM has a positive relationship with firms’ SP (Amjad
et al., 2022; Choi et al., 2016; Diabat and Govindan, 2011; Namagembe
et al., 2019). However, on contrary, it is also argued that IEM initiatives
are costly and have no positive effect on firms’ SP (Azevedo et al., 2011;
Rizki and Augustine, 2022). Given these inconsistent findings, the
following hypothesis is established for further investigation.
Hypothesis 1. Internal Environmental Management has a significant
positive effect on firms’ sustainable performance.
2.4. Green purchasing and firm sustainable performance
Green Purchasing (GP) refers to buying materials that not only
decrease waste, emission, and pollution but also facilitate easy recycling
and remanufacturing. GP enriches firms’ eco-responsible conduct by
reducing the use of scarce natural resources, and other materials and
energies having hazardous chemicals or adverse effects on the society
and environment (Amjad et al., 2022; Eltayeb et al., 2011; Zhu et al.,
2007). Many empirical studies noted that GP positively influences firms’
social and environmental performance by promoting cleaner produc­
tion, and decreasing emissions and pollution (Amjad et al., 2022; Carter
et al., 2000; Laosirihongthong and Tan, 2013; Namagembe et al., 2019).
GP also contributes to firms’ economic performance by increasing sales
through signaling products’ safe, hygienic, and positive image to the
customers, market, and society (Amjad et al., 2022; Carter et al., 2000;
Namagembe et al., 2019; Younis et al., 2016; Zailani et al., 2012).
However, GP is not trivial as it requires effective collaboration among all
stakeholders, especially buyers, and sellers for sharing relevant infor­
mation and experiences. Besides the comparatively higher prices of
green materials and products, GP also requires additional financial re­
sources for developing environmental competencies among managers.
Hence, many empirical studies reported that GP has no significant or
positive effect on firms’ SP (Azevedo et al., 2011; Eltayeb et al., 2011;
Green et al., 2012; Rizki and Augustine, 2022; H. Younis et al., 2016).
Based on these contradictory findings, the following hypothesis is
established for further investigation.
Hypothesis 2. Green Purchasing has a significant positive effect on
firms’ sustainable performance.
2.5. Eco-design and firm sustainable performance
Eco-design (ED) aims to uplift the quality and efficiency of a product
and reduce its negative effects on the customers, society, and the
H.U. Rahman et al.
environment (Amjad et al., 2022; Rizki and Augustine, 2022). In addi­
tion to discouraging the use of hazardous and toxic materials, ED also
aims to decrease resource consumption, waste, emission, and pollution
by encouraging the use of sophisticated technologies and cleaner en­
ergies in the products’ manufacturing process (Amjad et al., 2022;
Eltayeb et al., 2011; Namagembe et al., 2019; Rizki and Augustine,
2022). Furthermore, ED also intends to increase the biodegradability,
reusability, disassembly, and recyclability of the products. Many
empirical studies documented that products’ ED has a positive connec­
tion with firms’ SP (Diabat and Govindan, 2011; Eltayeb et al., 2011; J.
Sarkis, 2003; Zailani et al., 2012; Zhu et al., 2007; Zhu and Sarkis, 2007)
including social, environmental (Amjad et al., 2022), and economic
performance (Eltayeb et al., 2011; Namagembe et al., 2019; Rizki and
Augustine, 2022). However, ED is a proactive environmental strategy
that requires effective internal cross-functional cooperation, collabora­
tion with external stakeholders of the supply chain, and a consistent
evaluation of the product life cycle. Hence, ED not only complicates
firms’ operations but also negatively affects their economic performance
(Amjad et al., 2022; Green et al., 2012; Namagembe et al., 2019; Zhu
et al., 2007). Studies also noted that ED has no significant relationship
with firm environmental, social, and economic performance (Amjad
et al., 2022; Younis et al., 2016). Because of these contradictory find­
ings, the following hypothesis is established for further investigation.
Hypothesis 3. Eco-design has a significant positive effect on firms’
sustainable performance.
2.6. Collaboration with suppliers and customers and firm sustainable
performance
The effective collaboration of an organization with its suppliers en­
courages the development and execution of joint plans for the better­
ment of the society and environment (Vachon and Klassen, 2008; Rizki
and Augustine, 2022). Organization enriches suppliers’ response to
different ecological challenges by increasing the level of their awareness
and motivation for green production. Also, they may share the envi­
ronmental standards of their purchase policy for pushing suppliers to­
wards cleaner production (Amjad et al., 2022; Laosirihongthong and
Tan, 2013; Mishra et al., 2022). For example, Samsung Pakistan reports
that “we work solely with Eco Partner-certified suppliers so that we can
assess and manage the environmental impact that may occur in their
components, raw materials, and manufacturing process” (Samsung
Pakistan, 2023). Likewise, firms’ collaboration with customers also
positively influences the quality of their innovation and
decision-making. Besides the feedback, firms also acquire important
information about current market trends, and buyers’ sensitivity to the
environment from the customers (Mishra et al., 2022; Rizki and Au­
gustine, 2022; Vachon and Klassen, 2008). In addition, firms may also
educate customers by increasing the level of their awareness and respect
for the environment. However, customers being the key stakeholders,
are also capable of forcing firms for reducing the adversaries of their
operations and logistic activities on the ecosystem (Freeman, 1984).
Given that, CSC is a strategic resource that involves both the suppliers
and customers in firms’ decision-making, especially those related to the
society and environment (Amjad et al., 2022; Vachon and Klassen, 2008;
Zhu et al., 2008). Many empirical studies found that CSC promotes GP,
cleaner production, optimum level of inventory, and wise allocation as
well as consumption of resources which have positive implications for
their environmental, social, (Diabat and Govindan, 2011; Frosch, 1994;
Rizki and Augustine, 2022), and economic performance (Zhu et al.,
2007). However, firms’ meaningful or effective collaboration with both
the suppliers and customers is not easy as it requires additional efforts
and resources. Hence, it has no significant or positive impact on firms’
economic (Amjad et al., 2022; Namagembe et al., 2019; Younis et al.,
4
Journal of Cleaner Production 414 (2023) 137502
2016), social and environmental performance (Younis et al., 2016). In
view of these mixed findings, the following hypothesis is established for
further investigation.
Hypothesis 4. Collaboration with Suppliers and Customers has a sig­
nificant positive effect on firms’ sustainable performance.
2.7. Green supply chain management and firm sustainable performance –
the role of CPEC awareness
CPEC being part of China’s “Belt and Road (BRI) Initiative” is a
framework of regional connectivity started by China in Pakistan on 22nd
May 2013. The framework which has an approximate budget of 62
billion USD is the single largest foreign investment in the history of
Pakistan. Besides several other projects in different sectors of the
economy, CPEC also includes the development of road, rail, and air
transportation systems by constructing new economic corridors and
shortening or improving the already existing routes in the country (Ali
et al., 2018; Ritzinger, 2015; Stevens, 2015). Given that, CPEC is ex­
pected to create new business opportunities and attract more firms and
investors from China and other countries of the world (Ali et al., 2018;
Ritzinger, 2015; Stevens, 2015). This influx of international firms and
investors is believed to create positive prospects for GSCM of the local
firms by increasing their awareness, motivation, and capacity for green
production. In addition to increasing pressure and competition, inter­
national firms may also supplement the GSCM of local firms by sharing
information and experiences and establishing business relationships and
collaborations with them (Ali et al., 2018; Blanchard, 2018; Nazneen
et al., 2019; Niazi et al., 2019; Zahid et al., 2019). It is logical as sharing
information and operational experiences have played a vital role in the
social and economic development of Asia (Awais et al., 2019; Zhu et al.,
2007). Furthermore, domestic firms aware of the potential challenges
and opportunities associated with CPEC projects may also be more
serious about their success and survival. Hence, they may focus on
GSCM including IEM, GP, ED, and CSC for increasing their competi­
tiveness and legitimacy to maximize their returns from CPEC projects.
Besides, CPEC may also trigger the introduction of regulatory reforms
for improving GSCM and SP of the local firms (Ali et al., 2018; Awais
et al., 2019; Blanchard, 2018; Nazneen et al., 2019; Niazi et al., 2019;
Zahid et al., 2019). Thus, this study hypothesizes the positive role of
CPEC awareness in the nexus of GSCM and SP for increasing the moti­
vation and capacity of local firms to embed environmental protection in
their supply chain activities. This is aligned with stakeholder and
stakeholder salience theories that important and influential stakeholders
possess more “power”, “legitimacy” and “urgency” which effectively
push firms for social and environmental welfare. It seems rationale as
the regulators and policymakers of China and Pakistan are keen to
counter the criticism over CPEC projects for increasing pollution and
affecting the glaciers, agriculture, forests, air quality, water-based in­
dustries, hydroelectricity, natural reservoirs, and biodiversity of the host
country (Iqbal and Athar, 2018; Yamada et al., 2016). However, the
arguments whether in favor of or against CPEC are still not convincing
until supported by empirical evidence. In this vein, a few studies which
investigated the GSCM-SP nexus in Pakistan also could not pay attention
to the CPEC (Ahmed et al., 2020; Akhtar, 2019; Junaid et al., 2022; Khan
& Yu, 2021). Therefore, the following hypotheses are established to
explore the potential role of CPEC awareness in the nexus of GSCM and
SP by explicitly dividing the sample into firms aware and unaware of
CPEC.
Hypothesis 5. The significant positive effect of internal environmental
management on firms’ sustainable performance as assumed in hypoth­
esis 1 is stronger in the firms aware of CPEC than those which are
unaware.
H.U. Rahman et al. Journal of Cleaner Production 414 (2023) 137502

Hypothesis 6. The significant positive effect of green purchasing on concern or relevance with the supply chain activities. Out of 260
firms’ sustainable performance as assumed in hypothesis 2 is stronger in distributed questionnaires, 190 were returned in useable form and
the firms aware of CPEC than those which are unaware. hence, the response rate was 76% which is reasonable, particularly in
the case of manufacturing firms. The data collection was completed in 5
Hypothesis 7. The significant positive effect of eco-design on firms’
months due to the rigorous schedule of sample organizations. After
sustainable performance as assumed in hypothesis 3 is stronger in the
completing data entry, the study employed SmartPLS for the partial least
firms aware of CPEC than those which are unaware.
squares (PLS) analysis to estimate the research model of the study.
Hypothesis 8. The significant positive effect of the collaboration with SmartPLS, a second-generation statistical package, is preferred for esti­
suppliers and customers on firms’ sustainable performance as assumed mating data characterized by non-normality and small sample size
in hypothesis 4 is stronger in the firms aware of CPEC than those which (Antawi et al., 2022; Ringle et al., 2015). It consists of measurement and
are unaware. structural models where the former checks internal consistency,
convergent validity, and discriminant validity while the latter computes
3. Research design the t-values, p-values, R-square, path coefficient, f2, and MGA (Hair
et al., 2017). The study also applied SmartPLS structural mode analysis
By following the “research onion” of Saunders et al. (2019), this for MGA. “PLS multigroup analysis is used to determine if the PLS model
study employed a quantitative cross-sectional research design. In the significantly differs between groups” (Garson, 2016, p. 166). The MGA
first layer of the research onion, the study borrowed the positivism uses independent samples t-tests to compare paths between groups (Keil
philosophy since the data was collected through highly structured and et al., 2000). Unlike the traditional PLS technique, MGA embeds para­
predetermined techniques. As per the second layer of the theory metric techniques to test the assumption of multivariate normal distri­
development approach, the study employed the deductive approach to butions. Since the study divides the data into two different groups -
test the hypotheses established based on existing theory. There is a link CPEC aware and unaware; hence, it is important to use MGA for
between positivism, deduction, and a quantitative research design assessing the differences between them, if any (Jamal et al., 2021).
(Iddrisu, 2022; Saunders et al., 2019). According to the third layer of the
research onion, this study used the quantitative mono method for the 4. Data analysis and results
data collection using an adopted questionnaire as provided in Appen­
dix 4. Following the survey-based inquiry, the measurement scale for Table 1 reports the gender, age, education, and experience of the
GSCM dimensions including IEM (five items), GP (three items), ED (four respondents. Also, it provides information about the size, sector, and
items), and CSC (nine items) was adopted from the previous studies location - industrial estate of the respondents’ organizations. Among
(Fang and Zhang, 2018; Reefke and Sundaram, 2018; Zhu and Sarkis, 190 participants, 79.57% are males while 20.5% are females. The fe­
2004). Likewise, the measurement scale composed of 15 items covering males’ participation might be low due to their low representation in
all dimensions of SP like environmental, social, and economic perfor­ supply chain-related jobs, or less willingness to participate in the survey,
mance was also adopted from Zhu and Sarkis (2004). CPEC awareness especially in KP (Jamal et al., 2021). Most of the respondents (80.6%)
was gauged by using the dichotomous measurement of “Yes” and “No” have ages between 21 to 40 years and hold bachelor’s (43.2%) and
like many previous studies (Begum and Pereira, 2015; Jamal et al., master’s (31.1%) degrees. Also, they are having experience of 1 to 10
2021). This measurement is appropriate to be estimated through MGA years. Furthermore, most of the respondents are from small-size firms.
using the SmartPLS variance-based approach that has the power to Table 2 shows that the level of CPEC awareness is higher among
warily control between or among the sample precision (Garson, 2016). males than females. Moreover, the respondents in the age group of 21 to
The final layer of the research onion focuses on data collection and
analysis. In this regard, the study mainly focused on the manufacturing Table 1
firms located in the three major and already established industrial es­ Demographic details.
tates – Hayatabad (Peshawar), Hattar (Haripur), and Gadon (Swabi) of Details Count %
the KP province of Pakistan. The context of KP is significant as the
Gender Male 151 79.5%
Western Corridor of the CPEC is mainly passing through the province.
Female 39 20.5%
Given this, the provincial government of KP is not only establishing Age 20 years or less 16 8.4%
Rashakai Special Economic Zone but also extending the already existing 21–30 years 86 45.3%
Nowshehra Economic Zone. Besides, the provincial government has also 31–40 years 67 35.3%
announced the establishment of several other industrial and economic 41–50 years 15 7.9%
More than 50 years 6 3.2%
zones in the province. The population i.e. the number of supply chain Education Intermediate 22 11.6%
managers and sectional heads in the manufacturing firms located in the Bachelor 82 43.2%
three selected industrial estates was unknown; hence, the study Master Degree 59 31.1%
employed G*power software to compute sample size using the effect MPhil 23 12.1%
Ph.D. or Above 4 2.1%
size = medium, alpha = 0.05, power = 0.8, and predictors = 4, as rec­
Experience <1 year 59 31.1%
ommended by Yong et al. (2019). The G*power calculated a sample size 1–5 years 82 43.2%
of 130 respondents but keeping in view the multigroup analysis (MGA), 6–10 years 33 17.4%
the study selected a sample of 260 respondents by using simple random 11–15 years 11 5.8%
sampling. Simple random sampling is preferred, especially when the 16–20 years 5 2.6%
21–25 years 0 0.0%
sample frame is small and face-to-face contact is desired or required Organization Size Small (<49 employees) 123 64.7%
(Hair et al., 2017; Saunders et al., 2019). Medium (<250 employees) 32 16.8%
The authors visited the sample firms located at three different in­ Large (>250 employees) 35 18.4%
dustrial estates of the province for distributing and explaining a paper- Sector Industrial Products 93 48.9%
Food Products 18 9.5%
based questionnaire to all the potential respondents. The respondents
Home Appliances 18 9.5%
were also served with a cover letter ensuring their confidentiality and Information Technology 23 12.1%
explaining the academic purpose of the study. For selecting respondents, Any other sector 38 20.0%
the study followed an inclusion criterion to consider the managers, Industrial Estates Hayatabad 81 42.6%
sectional heads, and other officers somehow involved in the supply Hattar 71 37.4%
Gadon 38 20.0%
chain-related activities and exclude all others or those who had no

5
H.U. Rahman et al. Journal of Cleaner Production 414 (2023) 137502

Table 2 Finally, the discriminant validity of the model was tested by using
CPEC awareness details. Fornell-Larcker and HTMT criteria.
CPEC Awareness The statistics of both these tests pass the 0.85 thresholds which
indicate that the discriminant validity is established as reported in
Yes No
Table 4 and Table 5. These results provide evidence for qualifying the
Count % Count % measurement criteria of the model (Henseler et al., 2015).
Gender Male 136 79.5% 15 78.9% The hypotheses of the study were also tested by using the SmartPLS
Female 35 20.5% 4 21.1% structural model bootstrapping procedure with a resampling rate of
Age 20 years or less 14 8.2% 2 10.5%
5000 to ascertain the t-values, p-values, and bootstrapped confidence
21–30 years 79 46.2% 7 36.8%
31–40 years 57 33.3% 10 52.6% intervals (Hair et al., 2017) as reported in Table 6.
41–50 years 15 8.8% 0 0.0% Table 7 reports the MGA estimation for the nexus of GSCM (IEM, GP,
More than 50 years 6 3.5% 0 0.0% ED, and CSC) with SP in two groups - CPEC aware and unaware. Using
Education Intermediate 18 10.5% 4 21.1% the aware group as a base, the results of parametric and
Bachelor 76 44.4% 6 31.6%
Master Degree 58 33.9% 1 5.3%
Welch–Satterthwaite tests provide evidence for no significant difference
MPhil 15 8.8% 8 42.1% between the two groups for the hypothesized relationships. The study
Ph.D. or Above 4 2.3% 0 0.0% further applied industrial estate and industry type as conditions in MGA,
Experience <1 year 51 29.8% 8 42.1% however, still no significant difference could note in both groups (see
1–5 years 75 43.9% 7 36.8%
Appendix 2 and 3 for further details).
6–10 years 29 17.0% 4 21.1%
11–15 years 11 6.4% 0 0.0% The findings may be statistically insignificant as the difference be­
16–20 years 5 2.9% 0 0.0% tween the two groups is very small. However, despite this insignificance,
21–25 years 0 0.0% 0 0.0% the results of the two groups are different as reported in Table 6 and
Organization Small (<49 employees) 108 63.2% 15 78.9% discussed in section 5. The findings suggest that even an insignificant
Size Medium (<250 28 16.4% 4 21.1%
employees)
thin difference in the level of awareness affects the results for the GSCM-
Large (>250 35 20.5% 0 0.0% SP nexus. Table 8 summarizes the results of all hypotheses of the study.
employees)
Sector Industrial Products 86 50.3% 7 36.8% 5. Findings and discussion
Food Products 17 9.9% 1 5.3%
Home Appliances 16 9.4% 2 10.5%
Information 20 11.7% 3 15.8% The statistics for the combined model reported in Table 6 show that
Technology internal environmental management (IEM) exerts a significant positive
Any other sector 32 18.7% 6 31.6% effect on firms’ sustainable performance (SP). These findings support
Industrial Estate Hayatabad 72 42.1% 9 47.4% hypothesis 1 of the study which assumed a significant positive rela­
Hattar 64 37.4% 7 36.8%
Gadon 35 20.5% 3 15.8%
tionship between IEM and SP. The findings suggest that IEM plays an
imperative role in developing and implementing different strategies for
improving firms’ ecological performance by reducing waste, emissions,
pollution, and resource consumption (Green et al., 2012; Amjad et al.,
30 years are more aware than others which might be due to their more or 2022; Rahman et al., 2023). Following prior studies, the findings also
active use of the internet and social media. Similarly, the respondents imply that IEM positively contributes to firms’ SP by improving their
having bachelor’s and master’s degrees and experience in a range of 1 to compliance with good environmental practices and increasing the
5 years are more aware of CPEC than others. Furthermore, small firms allocation of the required resources, be human or financial (Choi et al.,
are more aware of CPEC than others. CPEC awareness is also high in the 2016; Diabat and Govindan, 2011). The findings are consistent with
firms located in Hayatabad followed by those in Hattar and Gadon in­ many previous studies (Amjad et al., 2022; Choi et al., 2016; Diabat and
dustrial estates. Govindan, 2011; Namagembe et al., 2019) but inconsistent with (Aze­
The model of the study also includes a higher-order construct for SP. vedo et al., 2011; Mumtaz et al., 2018; Rizki and Augustine, 2022). The
There are several methods available for the assessment of the higher- inconsistency in findings might be an outcome of the difference in
order models (Hwa et al., 2019). However, this study applied the sample, time, methods, or contexts of these studies (Wang and Clift,
two-stage or joint two-stage approach using the latent score which is one 2009; Rahman and Zahid, 2021). After dividing the sample into
of the recommended methods (Hwa et al., 2019; Ringle et al., 2012). The CPEC-aware and unaware firms, the findings for hypothesis 1 showing
latent variable score was obtained for the higher-order construct(s) of the significant positive association between IEM and SP could only be
the first stage using the measurement model calculations of lower-order validated for the former and not for the latter (Table 6). These findings
construct(s) in the SmartPLS (Antawi et al., 2022; Ringle et al., 2012). support hypothesis 5 which assumed that the significant positive rela­
Thus, the study first tests the first-order factors, followed by the tionship between IEM and SP is stronger in the firms aware of CPEC than
second-factor validity and reliability as shown in Fig. 1 (Yong et al., others or those which are unaware. The findings imply that local firms
2019). aware of CPEC consider IEM more important; thus, focusing on it for
The measurement model reported in Table 3 shows that outer enriching their competencies in environmental management, and other
loading (λ) values are above 0.60, which meets the reliability criteria income-generating ecological activities. Also, the findings suggest that
(Hair et al., 2017); however, the items lower than 0.60 were deleted due these firms are optimistic to gain more from CPEC different projects by
to reliability issues. Likewise, the average variance extracted (AVE) enriching IEM that positively influence their SP.
values are also above 0.50, which meets the convergent validity of the The combined analysis reported in Table 6 also shows that green
constructs (Hair et al., 2017). Besides, the model also tested the internal purchasing (GP) exerts a significant positive effect on firms’ sustainable
consistency using composite reliability (CR). All CR values are above the performance (SP). The findings provide support to hypothesis 2 of the
threshold of 0.70; hence qualify for internal consistency (Hair et al., study which assumed a significant positive association between GP and
2017). SP. The findings could be explained that GP improves firms’ social and

6
H.U. Rahman et al. Journal of Cleaner Production 414 (2023) 137502

Fig. 1. Measurement model.

Table 3
Measurement model.
Constructs First-order items Second-order items F.L C. Alpha rho_A CR AVE VIF

Collaboration with Suppliers and Customers CSC4 – 0.613 0.761 0.778 0.838 0.510 1.359
CSC5 – 0.680 1.444
CSC6 – 0.778 1.589
CSC7 – 0.726 1.485
CSC9 – 0.769 1.558
Eco-design ED1 – 0.718 0.732 0.737 0.832 0.555 1.352
ED2 – 0.716 1.643
ED3 – 0.835 1.864
ED4 – 0.703 1.378
Green Purchasing GP1 – 0.876 0.823 0.875 0.891 0.733 1.831
GP2 – 0.916 2.735
GP3 – 0.771 1.899
Internal Environmental Management IEM1 – 0.679 0.702 0.751 0.819 0.601 1.896
IEM2 – 0.739 1.924
IEM3 – 0.861 1.138
Sustainable Performance Eco Economic 0.686 0.753 0.771 0.840 0.570 1.304
Env Environmental 0.716 0.569 0.629 0.777 0.547 1.106
Soc Social 0.816 0.781 0.781 0.850 0.532 1.341

F.L: Factor Loadings; C. Alpha: Cronbach’s Alpha; CR: Composite Reliability; AVE: Average variance extracted; and VIF: Variance Inflation Factor.
Items deleted due to lower loadings: CSC1, CSC2, CSC3, CSC8, IEM 4, and IEM 5 (Hair et al., 2017).

environmental performance by encouraging the procurement of green
materials and cleaner energies and discouraging the purchase and use of
fossil fuels and toxic or hazardous materials that have adverse effects on
the society and environment. The findings also indicate that GP im­
proves firms’ economic performance by increasing sales through
signaling products’ safe, clean, and healthy image (Carter et al., 2000;
Rao and Holt, 2005; Zhu et al., 2007). The findings are similar to many
previous studies (Amjad et al., 2022; Carter et al., 2000; Laosir­
ihongthong and Tan, 2013; Namagembe et al., 2019), but dissimilar to a
few as well (Azevedo et al., 2011; Eltayeb et al., 2011; Green et al., 2012;
Rizki and Augustine, 2022). The dissimilar findings may be an outcome
of the contextual and methodological differences among these studies
(Wang and Clift, 2009; Rahman and Zahid, 2021). After dividing the
firms into CPEC-aware and unaware groups, the significant positive

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H.U. Rahman et al. Journal of Cleaner Production 414 (2023) 137502

Table 4 impression on firms’ sustainable performance (SP). These findings

Fornell-Larcker criterion. accept hypothesis 3 of the study which assumed that ED has a significant
(1) (2) (3) (4) (5) positive nexus with SP. The findings have a plausible explanation that
ED improves firms’ SP by developing new or enriching the already
Collaboration with Suppliers and 0.714
Customers (1) existing design of a product in a manner to increase its quality and ef­
Sustainable Performance (2) 0.455 0.742 ficiency and decrease its cost and harmful effects. By following the prior
Eco-design (3) 0.413 0.445 0.745 literature, the findings also explain that ED prioritizes the easy biode­
Green Purchasing (4) 0.373 0.481 0.228 0.857 gradability and recyclability of the products which have positive out­
Internal Environmental 0.461 0.385 0.221 0.253 0.763
Management (5)
comes for firms’ SP (Rizki and Augustine, 2022; Zhu and Sarkis, 2007).
The findings are aligned with many previous studies (Eltayeb et al.,
2011; Rizki and Augustine, 2022; Zailani et al., 2012; Zhu and Sarkis,
Table 5 2007). However, the findings are also not consistent with a few studies
HTMT. (Namagembe et al., 2019; Younis et al., 2016) may be due to the dif­
(1) (2) (3) (4) ference in their samples, methods, or contexts (Wang and Clift, 2009;
Rahman and Zahid, 2021). By dividing the sample, the findings for hy­
Collaboration with Suppliers and Customers
(1) pothesis 3 reflecting a significant positive association of ED with SP could
Sustainable Performance (2) 0.650 only be confirmed for the firms aware of CPEC and not others or those
Eco-design (3) 0.533 0.659 unaware. These findings corroborate hypothesis 7 that the significant
Green Purchasing (4) 0.473 0.618 0.298
positive relationship between ED and SP is stronger among the firms
Internal Environmental Management (5) 0.580 0.500 0.265 0.311
aware of CPEC than their unaware competitors. The findings possibly
suggest that the firms aware of CPEC prospects are likely to increase
their efforts, research, or spending on enriching ED to strategize it for
effect of GP (β = 0.381 and p-value >0.007) on SP is higher for the getting more market share in CPEC projects that positively influence
former than the latter (β = 0.289 and p-value >0.000) as reported in their SP. The finding, as well as its explanation, is somehow consistent
Table 6. These findings support hypothesis 6 which assumed that the with Zhu and Sarkis (2004) who asserted that Chinese firms improved
significant positive association between GP and SP is stronger among the their ED by increasing investment in research and development of
firms aware of CPEC than others or those which are unaware. The manufacturing-related technologies.
findings imply that firms aware of CPEC are more inclined towards The combined analysis reported in Table 6 shows that firms’
eco-friendly procurement than their unaware counterparts which am­ collaboration with suppliers and customers (CSC) has a positive but
plifies its significant positive effects on SP. These firms may rigorously statistically insignificant relationship with firms’ sustainable perfor­
follow GP for multiplying their benefits from CPEC which positively mance (SP). These findings do not support hypothesis 4 of the study,
influences their SP. which assumed a significant positive relationship between CSC and SP.
The statistics for the combined model reported in Table 6 also The findings may be explained that sample firms are yet to establish
explain that eco-design (ED) of the products exerts a significant positive strong and effective relationships with suppliers and customers that

Table 6
Hypotheses testing.
Combined Model

Std. Beta Std. Error t-values p-values CILL CIUL f2

Internal Environmental Management - > SP 0.178 0.045 3.954 0.000 0.095 0.273 0.042
Green Purchasing - > SP 0.321 0.060 5.391 0.000 0.201 0.427 0.148
Eco-design - > SP 0.274 0.061 4.511 0.000 0.156 0.391 0.104
Collaboration with Suppliers and Customers - > SP 0.140 0.082 1.714 0.087 − 0.025 0.306 0.021

CPEC- Aware

Std. Beta Std. Error t-values p-values CILL CIUL f2

Internal Environmental Management - > SP 0.158 0.057 2.748 0.006 0.045 0.269 0.031
Green Purchasing - > SP 0.381 0.158 2.695 0.007 0.071 0.708 0.219
Eco-design - > SP 0.294 0.080 3.566 0.000 0.136 0.445 0.111
Collaboration with Suppliers and Customers - > SP 0.163 0.099 1.584 0.114 − 0.051 0.357 0.025

CPEC- Unaware

Std. Beta Std. Error t-values p-values CILL CIUL f2

Internal Environmental Management - > SP 0.068 0.265 0.317 0.751 − 0.575 0.482 0.007
Green Purchasing - > SP 0.289 0.070 4.221 0.000 0.141 0.428 0.122
Eco-design - > SP 0.340 0.324 1.177 0.240 − 0.436 0.925 0.151
Collaboration with Suppliers and Customers- > SP 0.199 0.153 0.797 0.426 − 0.095 0.472 0.018

Table 7
Multigroup Analysis (MGA) between groups (aware and unaware).
Relationship Path Coefficients-diff (Aware Vs. p-Value original 1-tailed (Aware Vs. p-Value new (Aware Vs. p-Value (Parametric p-Value (Welch-
Unaware) Unaware) Unaware) Test) Satterrthwait Test)

IEM - > SP 0.072 0.420 0.841 0.676 0.794

GP - > SP − 0.130 0.795 0.410 0.408 0.448
ED - > SP − 0.094 0.663 0.673 0.668 0.780
CSC - > SP 0.035 0.413 0.827 0.852 0.843

8
H.U. Rahman et al.
Table 8
Summary of hypotheses results.
Detail of Hypotheses
Hypothesis 1: Internal environmental management has a significant
positive effect on firms’ sustainable performance.
Hypothesis 2: Green purchasing has a significant positive effect on
firms’ sustainable performance.
Hypothesis 3: Eco-design has a significant positive effect on firms’
sustainable performance.
Hypothesis 4: Collaboration with suppliers and customers has a
significant positive effect on firms’ sustainable performance.
Hypothesis 5: The significant positive effect of internal
environmental management on firms’ sustainable performance as
assumed in hypothesis 1 is stronger in the firms aware of CPEC
than those which are unaware.
Hypothesis 6: The significant positive effect of green purchasing on
firms’ sustainable performance as assumed in hypothesis 2 is
stronger in the firms aware of CPEC than those which are unaware.
Hypothesis 7: The significant positive effect of eco-design on firms’
sustainable performance as assumed in hypothesis 3 is stronger in
the firms aware of CPEC than those which are unaware.
Hypothesis 8: The significant positive effect of the collaboration with
suppliers and customers on firms’ sustainable performance as
assumed in hypothesis 4 is stronger in the firms aware of CPEC
than those which are unaware.
could exert significant positive implications for their SP. This seems
rational as firms and their suppliers and customers are mostly local and
thereby perhapes less concerned about different social and ecological
challenges. Therefore, both the buyers and sellers may create no-to-low
or very little pressure and persuasion for improving each other’s SP
(Namagembe et al., 2019; Vachon and Klassen, 2008). The findings are
consistent with many studies (Namagembe et al., 2019), however,
inconsistent with Zhu and Sarkis (2004) may be due to methodological
or contextual differences (Wang and Clift, 2009; Rahman and Zahid,
2021). Interestingly, the insignificant findings for hypothesis 4 remain
unchanged for both the CPEC-aware and unaware firms after dividing
the sample. These findings do not support hypothesis 8 of the study which
assumed that the significant positive nexus between CSC and SP is
stronger among the firms aware of CPEC than others. The findings have
a plausible explanation that the local industry is less optimistic about the
CPEC’s role in bridging the lack of communication, cooperation, and
trust-based relationship among domestic firms, suppliers, and cus­
tomers. Following prior studies, the findings may also imply that the
influx of Chinese and other international firms under CPEC might not
improve the CSC of the local firms due to competition or their fear or risk
of leaking business secrets to their domestic competitors (Namagembe
et al., 2019; Yigitbasioglu, 2004; Rahman et al., 2017, 2018).
6. Conclusions
This study investigated the impact of four important dimensions of
GSCM (IEM, GP, ED, and CSC) on the SP (environmental, social, and
economic) of manufacturing firms located in the KP province of
Pakistan. The findings explain that except for the insignificant role of
CSC, all other dimensions of GSCM namely IEM, GP, and ED significantly
and positively affect firms’ SP. The findings suggest that IEM, GP, and
ED assist firms in reducing the negative effects of their operations on the
society and environment which have positive implications for their SP.
By re-investigating the GSCM-SP nexus, the findings could only validate
for the respondents or firms aware of CPEC and not others or those
unaware of CPEC as none of the GSCM dimensions, except the signifi­
cant positive coefficient of GP, has any significant relationship with SP
of the firms unaware of CPEC. These findings advocate that CPEC being
an influential stakeholder has positive prospects for GSCM (IEM, GP, and
Journal of Cleaner Production 414 (2023) 137502
ED) and consequently SP of the local firms. The outcomes suggest that
firms aware of CPEC prospects are more optimistic and serious to enrich
Result their GSCM especially, IEM, GP, and ED for better coping with the up­
coming challenges and tapping additional business opportunities asso­
Supported
ciated with CPEC’s various projects. Overall, the study contributes to the
Supported existing body of knowledge by inquiring how GSCM affects firms’ SP in a
developing country like Pakistan which has a dearth of research in the
Supported area (Amjad et al., 2022; Rahman et al., 2023). Appendix 1 shows that a
Not
total of only four studies were previously carried out on the GSCM-SP
Supported nexus in Pakistan which also neither considered the social dimension
Supported of SP nor probed the potential role of CPEC in their relationship. The
study also contributes to the methodology by using Multigroup Analysis
(MGA) which has rarely been used by the previous researchers in the
Supported area.
6.1. Theoretical implications
Supported
The findings of the study (except for hypothesis 4 and hypothesis 8)
Not are consistent with the stakeholder theory that GSCM protects the
Supported ecosystem from the negative effects of globalization, industrialization,
and commercialization that have positive implications for firms’ SP
(Darwish et al., 2021; Roh et al., 2022; Yawar and Seuring, 2017). The
study also contributes to the stakeholder salience theory by inquiring
about the potential role of CPEC awareness in the GSCM-SP nexus. The
positive findings for firms aware of CPEC also somewhat endorse the
“power” assumption of the stakeholder salience theory that has rarely
been tested in the past, especially in the context of GSCM-SP in Pakistan
(Barney, 1991; Mitchell et al., 1997; Amjad et al., 2022). As per the
“power” assumption, CPEC being an “external pressure or stimuli” en­
ables local firms, especially those which are aware to improve SP by
enriching the quality of their GSCM. Furthermore, the CPEC-related
findings of the study also somehow validate the stakeholder salience
theory’s assumptions of “willingness to cooperate” and “potential to
influence” (Braun and Starmanns, 2009), which were overlooked in the
original work of Mitchell et al. (1997).
6.2. Practical and managerial implications
The study has several practical and managerial implications. The
study updates all the key stakeholders about the imperative role of
GSCM, especially IEM, GP, and ED in improving firms’ SP in a country
like Pakistan where GSCM and SP are still new practices. Firms and their
top management dedicated to improving SP may enrich GSCM by
extending social and ecological welfare and decreasing waste, pollution,
emission, and resource consumption, among others. Managers may also
use GSCM as a strategy for improving SP by signaling firms’ eco-friendly
and socially responsible image and attracting more investors, customers,
suppliers, and creditors from local as well as international markets.
Besides, the managers and firms unaware of CPEC prospects may follow
their colleagues and competitors in updating themselves and enriching
their GSCM for maximizing its consequent benefits. In this vein, the
government and CPEC authority also need to publicize all relevant in­
formation about various CPEC projects for uplifting the stakeholders’
awareness level, especially local industry. Increasing the level of
awareness and sharing more details about CPEC projects may not only
expedite their successful completion but also maximize their "skimming"
by increasing public-private partnerships. Furthermore, the government
may also increase and expedite efforts for similar other regional and
international economic collaborations having positive outcomes for
sustainable growth and development.
The insignificant role of CSC suggests that firms lack effective
communication, coordination, and trust-based relationship with their
9
H.U. Rahman et al. Journal of Cleaner Production 414 (2023) 137502

suppliers and customers. It is an interesting managerial implication that
triggers a critical evaluation of the nature, scope, and quality of the
firms’ interaction and collaboration with their suppliers and customers.
Therefore, managers need to know whether firms establish CSC with a
genuine motive of promoting SP or rather a cosmetic measure to avoid
public attention and improve their reputation. Given that, managers
require to establish and increase firms’ meaningful engagements with all
stakeholders including suppliers and customers and involve them in the
decision-making process of the supply chain-related activities.
6.3. Limitations and future research directions
GSCM and SP. Lastly, although the difference between CEPC-aware and
unaware respondents is small, still, it provides space and motivation for
further research in the area.
Credit author statement
Haseeb Ur Rahman: Ideas, Writing – Original Draft, Writing-
Reviewing and Editing. Muhammad Zahid: Conceptualization, Data
Collection and Analysis, Methodology, Software. Mehran Ullah: Soft­
ware, Validation. Mamdouh Abdulaziz Saleh Al-Faryan: Investiga­
tion, Editing, Review

The study has a few limitations. Firstly, it used IEM, GP, ED, and CSC
as predictors; thus, future studies may also focus on some other pre­ Declaration of competing interest
dictors of SP and potential moderations and mediations in the nexus of
GSCM and SP. Secondly, the data of the study is solely related to the KP The authors declare that they have no known competing financial
province of Pakistan; therefore, future studies may expand their scope to interests or personal relationships that could have appeared to influence
other provinces of the country or other countries and regions of the the work reported in this paper.
world. Thirdly, this inquiry is purely quantitative; hence, studies in the
future may adopt a mixed method of research for getting richer and Data availability
deeper insights. Fourthly, the cross-sectional data of the study affect the
assessment of the potential dynamic changes in the relationship between Data will be made available on request.

Appendix 01. Literature Review

Literature Review Summary

Dimensions of Green Supply Chain Management and their Description

SNo. Source(s) Dimensions Description

1 Lee et al. (2014) Internal Environment The procedure to develop green supply chain management as a strategic competitive advantage through the
Management (IEM) support and commitment of top and middle-level management.
2 Green et al. (2015) Green Purchasing (GP) The procurement of products that have minimal or reduced negative impacts on the environment
3 Sahoo and Eco-Design (ED) Designing the products in a manner that minimum material and energy is consumed in the manufacturing
Vijayvargy (2021) process. It also ensures the reuse and recycling of the product after it is utilized.
4 Mishra et al. (2022) Collaboration with Suppliers and Establishing a working relationship with suppliers and customers to develop and deliver environment-friendly
Customers (CSC) products and services
Green Supply Chain Management and Firm Sustainable Performance

Sources/Context Dependent Variables Independent Variables Results

5 Al-Ghwayeen and Environmental and Export GP, IEM, ED and Customer Cooperation GSCM has a positive impact on both environmental and export
Abdallah (2018) Performance performance.
-Jordan
6 Laari et al. (2018) Environmental and Financial IEM and Collaboration with Customers Significant positive effect on environmental performance while
-Finland Performance insignificant on financial performance
7 Cousins et al. (2019) Economic and GSCM measured by 7 items Significant positive relationships
United Kingdom Environmental Performance
8 Namagembe et al. Environmental, Economic GP, IEM, Significant positive relationships
(2019) - Uganda and Social Performance ED,
Customer Cooperation
Investment Recovery
9 Yildiz Çankaya and Environmental, Economic IEM, ED, GP, and Investment Recovery All the dimensions of GSCM except GP have a positive relationship
Sezen (2019) -Turkey and Social Performance with at least one SP indicator.
10 Abu Seman et al. Environmental Performance GP, IEM Significant positive relationships
(2019) - Malaysia and Green Innovation
Customer Cooperation, and
Reverse Logistic
11 Le (2020) - Vietnam Environmental, Economic GP, ED, Green Manufacturing, and Green ED and GM have a positive impact on all three dependent variables,
and Social Performance Distribution however, GP has a positive effect on social and economic
performance while GD has a positive association with
environmental performance only.
12 Abdallah and Environmental, Operational GP, IEM, ED, CSC Significant positive relationships
Al-ghwayeen (2020) - and Business Performance
Jordan
13 Han and Huo (2020) - Economic, Environmental Green Internal Integration (GII), Green Significant positive findings except for the insignificant association
China and Social Performance Customer Integration (GCI), Green Supplier between GCI and GSI.
Integration (GSI)
14 Sahoo and Vijayvargy Environmental, Operational, GP, All dimensions of GSCM except GP and IEM significantly predict at
(2021) - India and Economic Performance IEM, ED, least one of the SP indicators
Customer Collaboration and
Investment Recovery
(continued on next page)

10
H.U. Rahman et al. Journal of Cleaner Production 414 (2023) 137502

(continued )
Green Supply Chain Management and Firm Sustainable Performance

Sources/Context Dependent Variables Independent Variables Results

15 Rizki and Augustine Sustainability Performance GP, Green Distribution, Green Marketing, No effect of GP, IEM, and green marketing on sustainability
(2022) - Indonesia IEM, ED, Customer Collaboration, and performance while significant positive impact of ED and investment
Investment Recovery recovery on SP.
16 García Alcaraz et al. Environmental Performance Environmental Management System EMS and EEM have significant positive coefficients while ED has no
(2022) - Mexico (EMS), ED, External Environmental effect.
Management (EEM)
17 Rattanapun et al. Environmental Protection GP, Green Packaging, and Green Marketing Significant positive associations
(2022) - Thailand and Sustainable
Performance
Studies Using Multigroup Analysis
18 Pinto (2020) - Portugal Economic and IEM, ED, GP, Green Production, CSC, The dataset composed of eight groups produced mixed results -
Environmental Performance Reverse Logistics positive, negative, and no relationships in different groups.
19 Fianko et al. (2021) - Environmental Performance Green Design, GP, and Green Construction Except for the insignificant effect of green design, all other
Ghana relationships were positive and significant.
20 Nguyen et al. (2021) - Environmental Performance Green Supply Chain Integration (GSCI) Significant positive association
Vietnam
21 Raza et al. (2021) - Sustainability Performance Sustainable Supply Chain Management Significant positive associations in both SMEs and large firms.
China Practices (SSMP)
Green Supply Chain Management and Firm Sustainable Performance in Pakistan

Source(s) Dependent Variables Independent Variables Results

22 Akhtar (2019) Economic Performance GSCM Positive impact

23 Ahmed et al. Economic and Environmental IEM, ED, GP, And Collaboration with Customers All the GSCM dimensions have a positive impact on
(2020) Performance environmental performance while the impact of IEM and ED
on economic performance was insignificant.
24 Junaid et al. Green Innovation and Financial Internal Integration Significant positive associations
(2022) Performance Customer Integration
Supplier Integration
25 Khan et al. Operational Performance Independent variables (GSCM): Green GSCM has a positive coefficient and partial mediation
(2022) manufacturing, Eco-design, Investment recovery,
Green information system, and GP
Mediation: Technological Innovation
26 Rehman Khan Competitive Advantage, and IEM, Green Information System, ED, Green Significant positive association
and Yu (2021) Economic and Environmental Manufacturing, Green Transportation, and Green
Performance Distribution

Appendix 2. Multigroup Analysis using Industrial Estate as a Condition

Path Path Path p-Value p-Value p-Value p-Value new p-Value new p-Value new
Coefficients-diff Coefficients-diff Coefficients-diff original 1- original 1- original 1- (Location (Location (Location
(Location (Location (Location tailed tailed tailed IndEstate(1.0) IndEstate(1.0) IndEstate(2.0)
IndEstate(1.0) - IndEstate(1.0) - IndEstate(2.0) - (Location (Location (Location vs Location vs Location vs Location
Location Location Location IndEstate(1.0) IndEstate(1.0) IndEstate(2.0) IndEstate IndEstate IndEstate
IndEstate(2.0)) IndEstate(3.0)) IndEstate(3.0)) vs Location vs Location vs Location (2.0)) (3.0)) (3.0))
IndEstate(2.0)) IndEstate(3.0)) IndEstate(3.0))

CSC − 0.182 − 0.17 0.012 0.81 0.806 0.479 0.38 0.389 0.957
-
>
SP
ED - 0.202 0.213 0.01 0.106 0.131 0.472 0.212 0.261 0.944
>
SP
GP - − 0.003 − 0.024 − 0.021 0.507 0.551 0.55 0.986 0.899 0.899
>
SP
IEM 0.053 0.108 0.055 0.368 0.275 0.393 0.737 0.551 0.786
-
>
SP
Industrial Estates: 1. Hayatabad, 2. Hattar, and 3. Gadon.

11
 H.U. Rahman et al.
Appendix 3. Multigroup Analysis using Industry Type/Sector as a Condition

Path Path Path Path Path Path p-Value p-Value p-Value p-Value p-Value p-Value p-Value p-Value p-Value p-Value p-Value p-Value
Coefficients- Coefficients- Coefficients- Coefficients- Coefficients- Coefficients- original original original original original original new new new new new new
diff diff diff diff diff diff 1-tailed 1-tailed 1-tailed 1-tailed 1-tailed 1-tailed (Industry (Industry (Industry (Industry (Industry (Industry
(Industry (Industry (Industry (Industry (Industry (Industry (Industry (Industry (Industry (Industry (Industry (Industry Sector(1) Sector(1) Sector(1) Sector(2) Sector(2) Sector(3)
Sector(1) - Sector(1) - Sector(1) - Sector(2) - Sector(2) - Sector(3) - Sector(1) Sector(1) Sector(1) Sector(2) Sector(2) Sector(3) vs vs vs vs vs vs
Industry Industry Industry Industry Industry Industry vs vs vs vs vs vs Industry Industry Industry Industry Industry Industry
Sector(2)) Sector(3)) Sector(4)) Sector(3)) Sector(4)) Sector(4)) Industry Industry Industry Industry Industry Industry Sector(2)) Sector(3)) Sector(4)) Sector(3)) Sector(4)) Sector(4))
Sector(2)) Sector(3)) Sector(4)) Sector(3)) Sector(4)) Sector(4))

CSC 0.247 − 0.262 − 0.459 − 0.51 − 0.706 − 0.197 0.262 0.84 0.817 0.889 0.893 0.632 0.524 0.319 0.366 0.221 0.214 0.737
-
12

>
SP
ED - 0.181 0.015 0.034 − 0.166 − 0.147 0.019 0.339 0.462 0.389 0.642 0.588 0.424 0.678 0.924 0.779 0.716 0.824 0.848
>
SP
GP - − 0.186 0.111 0.494 0.297 0.681 0.383 0.69 0.299 0.076 0.246 0.109 0.174 0.621 0.599 0.152 0.491 0.218 0.348
>
SP
IEM − 0.134 − 0.072 0.564 0.062 0.699 0.637 0.708 0.623 0.026 0.449 0.04 0.057 0.585 0.753 0.052 0.899 0.079 0.114
-
>
SP

Industry Sectors: 1. Industrial Products, 2. Food Products, 3. Home Appliances, 4. Information Technology, and 5. Any other sector.
Note: MGA of sector 5 (any other sector) was not performed due to a singular matrix issue.

Journal of Cleaner Production 414 (2023) 137502

H.U. Rahman et al. Journal of Cleaner Production 414 (2023) 137502

Appendix 4. Questionnaire

Green Supply Chain Management (GSCM)

Collaboration with Suppliers & Customers

CSC1: We work in collaboration with our suppliers and consider environmental concerns in designing and manufacturing our products.
CSC2: We as well as our suppliers have a good understanding of the clean and green environment and are aware of our responsibilities in this
regard.
CSC3: We consistently remind our suppliers to promote environment-friendly practices.
CSC4: We are committed to manufacturing and supplying our products in an environment-friendly manner.
CSC5: Our customers take an interest and ask about our efforts and activities for protecting the environment.
CSC6: Our customers push us to select suppliers who are serious about the environment and have sustainable operations.
CSC7: We regularly take customers’ feedback about eco-design and other environmental features of our products.
CSC8: We have a proper information-sharing system that works closely with our suppliers, vendors & customers for the betterment of the
environment.
CSC9: We share our targets for Green Supply Chain Management with our suppliers & customers.

Eco-Design
ED1: We develop a product design that consumes less energy.
ED2: Our product design facilitates recycling.
ED3: We manufacture our products from harmless raw materials.
ED4: Our products are environment friendly & of superior quality.

Green Purchasing/Procurement
GP1: We seek to know about the environmental objectives of our suppliers.
GP2: We ensure that our suppliers supply us with eco-friendly & superior-quality materials.
GP3: Our suppliers are committed to green partners.

Internal Environment Management

IEM1: We have a proper system for Total Quality Management.
IEM2: The top & middle-level managers of our company are serious and committed to adopting Green practices in all supply chain-related
activities.
IEM3: Our company has ISO certification.
IEM4: Our company shows full compliance with the comments and observations provided by internal & external audits.
IEM5: We have and follow the environmental plan for evaluating and selecting suppliers.

Sustainable Performance

Environmental Protection
EP1: We contribute to air quality and reduce air pollution.
EP2: Our Green practices are effective in reducing or controlling water pollution.
EP3: We have significantly reduced the use of harmful materials in the manufacturing of our products.
EP4: Our Green practices have helped us to improve the environment of our company.
EP5: We believe that our environment-friendly practices contribute to greening the environment.

Social sustainability
Soc1: We share relevant, important, and timely information with our stakeholders, especially suppliers, and customers.
Soc2: We address some social issues with our suppliers jointly.
Soc3: We and our suppliers have similar corporate cultures and management styles.
Soc4: Our major suppliers have a trust-based relationship with each other.
Soc5: We have a good and family-like relationship with all our suppliers.

Economic sustainability
Eco1: We have somehow reduced our cost of materials after practicing green supply chain management.
Eco2: We have a reduced cost of energy.
Eco3: We have increased our brand image by adopting GSCM which has positive implications for our sales revenue.
Eco4: We have improved our financial performance after starting green practices.
Eco5: We have improved our economic performance after following green supply chain management practices.

CPEC Awareness
CPEC1: CPEC awareness has started improving the green supply chain and sustainable practices of the company.

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H.U. Rahman et al. Journal of Cleaner Production 414 (2023) 137502

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