The Impact of Strategic Environmental Management Capabilities on the Competitiveness of an Oil and Gas Industry’s Supply Chain: An Empirical Evaluation of the Natural Resource-Based View of Firms

Abstract

AbstractThe Oil and Gas (O&G) industry has been subjected to stringent environmental regulations and increasing stakeholders’ criticisms because of its devastating negative environmental impacts. Consequently, firms operating in the industry’s supply chain are increasingly facing intense pressures to develop the strategic capabilities for implementing green practices to reduce the environmental impacts of operations. From a theoretical perspective, the Natural Resource-Based View (NRBV) suggests that the strategic environmental capabilities of pollution prevention (PPC), product stewardship (PSC) and clean technology (CTC) can generate sustained competitive advantage for firms. However, the extant empirical research investigating the impact of the three NRBV strategic environmental capabilities (PPC, PWC and CTC) on firms’ competitive performance has yielded inconsistent results. Therefore, this paper adopts the theoretical lens of NRBV to develop and empirically assess an integrated framework of strategic environmental management capabilities (SEMC) and competitiveness in the context of the Nigerian O&G industry. Using a multiple regression technique to analyse the responses of 214 managers across the supply chain of the Nigerian O&G industry, this study examines the impact of the three NRBV-based SEMC (PPC, PWC and CTC) on the economic and environmental competitiveness of the firms operating in the supply chain of the Nigerian O&G industry. First, the results indicate that the three SEMCs have positive impacts on the environmental competitiveness of the O&G firms. However, while PPC and PSC are positively related to the economic competitiveness of firms, CTC has no statistically significant impact on economic competitiveness. These findings suggest that O&G firms in developing nations need to channel efforts to build their SEMCs for implementing green practices to enhance their economic and environmental competitiveness. The results further highlight the need for policymakers in petroleum-producing nations to promote policies that foster the adoption of green practices by O&G firms.