Did reverse logistics practices hit the triple bottom line of Chinese manufacturers?
Reverse logistics (RL) practices represent an important and emerging trend in China's manufacturing practices. An increasing number of Chinese manufacturers have integrated RL practices in their operations to develop sustainable competitive advantage. There are six broad aspects of practicing RL which include waste management, recycling, reuse, reprocessing, materials recovery, and design for RL. The literature remains unclear, in particular Chinese manufacturing context, as to how these RL practices are related to organizational bottom line with respect to operational, financial, and social performance outcomes. Using survey data collected from Chinese export-oriented manufacturers, we applied seemingly unrelated regressions to determine if these six RL practices contribute to these three performance parameters simultaneously. The theory of production frontier is used to characterize the RL practices adoption and the performance implications. Our results indicate that the adoption of RL practices by Chinese manufacturers generates substantial environmental and financial gains, but not social benefits. This study extends the frontier of managerial knowledge for Chinese manufacturers by highlighting the emerging trends in RL practices and providing evidence on the business value of adopting RL practices.
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