Green Supply Chain Management and Sustainable Competitive Advantage: The Mediating Role of Green Innovation and the Moderating Role of Institutional Pressure

Abstract

In the emerging economies, the ability of manufacturing companies to demonstrate that the adoption of environmental responsibly can be a powerful tool to ensure long-term competitiveness rather than simply an increased cost has become a growing concern. This study explored the role of Green Supply Chain Management (GSCM) in building sustainable competitive advantage (SCA) via green innovation (GI) and if institutional pressure (IP) enhances this relationship. A quantitative explanatory design was used and the data were collected from 260 organisations working in manufacturing and industrial sector of Multan District in Punjab, Pakistan from the managers and supervisory level employees by self-administered questionnaires. The hypotheses were tested using Partial Least Squares Structural Equation Modeling (PLS-SEM) method with bootstrapping. The results showed that GSCM had a significant positive effect on both green innovation and sustainable competitive advantage. The direct link between GSCM and sustainable competitive advantage was also positive and partially mediated by green innovation, and was positively moderated by institutional pressure (favored by greater regulatory, customer, competitor pressure). This study combines the natural-resource-based view and institutional theory and provides practical suggestions for managers and policymakers who would like to turn green supply-chain practices into lasting competitive advantages.