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Covariance versus component-based estimations of performance in green supply chain management

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  • De Giovanni, Pietro
  • Esposito Vinzi, Vincenzo

Abstract

In this paper, we investigate the relationships between environmental management (EM) and performance to verify: whether the implementation of an effective internal environmental is a firm’s precondition to belong to a green supply chain; which type of environmental practices (either internal or external) contribute the most to increasing a firm’s performances; and whether performing the environment translates into higher economic performance. We use structural equation modeling for testing our research hypotheses on a large sample of Italian firms, and estimate the structural paths between constructs by means of both covariance- and component-based approaches. The use of both estimation methods allows us contributing to the recent debate about the specification of the “performance” construct as an emerging rather than as a latent variable, and then using formative rather than reflective indicators. Formative indicators are used whenever a construct does not exist without its measures, any change in one of the indicators causes a change in the construct, and the measures are ingredients of the construct rather than being caused by it. For instance, economic performance is an emerging construct since economic measures (e.g., profits and market share) contribute to forming the construct rather than reflecting the behavior of the latent variable. We show that the correct model specification changes the estimates of the path coefficients and leads to research findings aligned to the literature. Our results indicate that being green internally is a prerequisite for collaboration into a green supply chain, internal EM contributes to increasing performance more than external EM, while performing the environment does not lead to a higher economic performance.

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Bibliographic Info

Article provided by Elsevier in its journal International Journal of Production Economics.

Volume (Year): 135 (2012)
Issue (Month): 2 ()
Pages: 907-916

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Handle: RePEc:eee:proeco:v:135:y:2012:i:2:p:907-916

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Web page: http://www.elsevier.com/locate/ijpe

Related research

Keywords: Green supply chain management; Environmental performance; Economic performance; PLS Path Modeling; Formative indicators;

References

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  1. Koufteros, Xenophon & Marcoulides, George A., 2006. "Product development practices and performance: A structural equation modeling-based multi-group analysis," International Journal of Production Economics, Elsevier, vol. 103(1), pages 286-307, September.
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  3. Diamantopoulos, Adamantios & Riefler, Petra & Roth, Katharina P., 2008. "Advancing formative measurement models," Journal of Business Research, Elsevier, vol. 61(12), pages 1203-1218, December.
  4. Zhu, Qinghua & Sarkis, Joseph & Lai, Kee-hung, 2008. "Confirmation of a measurement model for green supply chain management practices implementation," International Journal of Production Economics, Elsevier, vol. 111(2), pages 261-273, February.
  5. Jarvis, Cheryl Burke & MacKenzie, Scott B & Podsakoff, Philip M, 2003. " A Critical Review of Construct Indicators and Measurement Model Misspecification in Marketing and Consumer Research," Journal of Consumer Research, University of Chicago Press, vol. 30(2), pages 199-218, September.
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  7. Vachon, Stephan & Klassen, Robert D., 2008. "Environmental management and manufacturing performance: The role of collaboration in the supply chain," International Journal of Production Economics, Elsevier, vol. 111(2), pages 299-315, February.
  8. Handfield, Robert & Walton, Steven V. & Sroufe, Robert & Melnyk, Steven A., 2002. "Applying environmental criteria to supplier assessment: A study in the application of the Analytical Hierarchy Process," European Journal of Operational Research, Elsevier, vol. 141(1), pages 70-87, August.
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  10. Gudergan, Siegfried P. & Ringle, Christian M. & Wende, Sven & Will, Alexander, 2008. "Confirmatory tetrad analysis in PLS path modeling," Journal of Business Research, Elsevier, vol. 61(12), pages 1238-1249, December.
  11. Hueting, Roefie & Reijnders, Lucas, 2004. "Broad sustainability contra sustainability: the proper construction of sustainability indicators," Ecological Economics, Elsevier, vol. 50(3-4), pages 249-260, October.
  12. Hackett, Steven C. & Srinivasan, Krishna, 1998. "Do supplier switching costs differ across Japanese and US multinational firms?," Japan and the World Economy, Elsevier, vol. 10(1), pages 13-32, January.
  13. Álvarez Gil, M. J. & Burgos Jiménez, J. & Céspedes Lorente, J. J., 2001. "An analysis of environmental management, organizational context and performance of Spanish hotels," Omega, Elsevier, vol. 29(6), pages 457-471, December.
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Cited by:
  1. Yang, Chung-Shan & Lu, Chin-Shan & Haider, Jane Jing & Marlow, Peter Bernard, 2013. "The effect of green supply chain management on green performance and firm competitiveness in the context of container shipping in Taiwan," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 55(C), pages 55-73.
  2. Grekova, K. & Bremmers, H.J. & Trienekens, J.H. & Kemp, R.G.M. & Omta, S.W.F., 2014. "Extending environmental management beyond the firm boundaries: An empirical study of Dutch food and beverage firms," International Journal of Production Economics, Elsevier, vol. 152(C), pages 174-187.

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