Green supplier governance and firm performance: a comprehensive understanding of three governance approaches

Abstract

PurposeThis study aims to develop a comprehensive green supplier governance (GSG) concept and explore whether specific GSG approaches (green supplier assessment, green supplier assistance and green strategic partnership with suppliers (GSPS)) bring environmental and economic performance. Moreover, this study aims to reveal a synergistic effect of three GSG approaches on performance improvement.Design/methodology/approachUsing data collected from 200 Chinese manufacturing firms, regression analysis was employed to reveal the relationship between specific GSG approaches and firm performance. Further, cluster analysis was used to identify groupings of firms regarding implementation levels of three GSG approaches and compare the performance of the firm groups.FindingsGreen supplier assessment (GSA) can bring environmental performance, but GSA is not associated with economic performance. Green supplier assistance is positively associated with economic performance, while green supplier assistance cannot improve environmental performance. Only GSPS leads to improvement for both environmental and economic performance. Furthermore, firms with high implementation levels of GSA and GSPS (whether with high or low implementation levels of GSAS) can achieve the best environmental and financial performance.Practical implicationsThis study provides implications for firms to more strategically and comprehensively implement GSG approaches, which can be more effective in bringing environmental and economic performance.Originality/valueThe authors' study extends the GSG concept with two approaches by subdividing the collaborative approach into green supplier assistance and GSPS based on the collaboration levels. This study also sheds light on how to improve firm performance by different GSG approaches and reveals a synergistic effect of three GSG approaches on performance.