Assessing the Nexus between Supplier and Customer Integration and Environmental Cost Performance: Insights into the Role of Digital Transformation

Abstract

Since the beginning of the 21st century, environmental protection and digital supply chains have increasingly garnered attention. As firms transition to green practices, how to achieve competitive advantage by reducing environmental costs has become one of the key concerns for many business managers. This study aims to examine how supplier and customer integration affect a firm’s environmental cost performance while considering the moderating effect of digital transformation. Following a survey conducted by a professional research agency on 800 Chinese manufacturing firms specializing in green products, the research model was tested using structural equation modeling and hierarchical regression analysis. The results indicate a significant positive relationship between both supplier integration and customer integration with a firm’s environmental cost performance. Additionally, positive digital transformation reinforces the relationship between supplier integration and customer integration. However, there are limitations due to the study’s background, scope, and sample size. This study underscores the impact of supplier integration and customer integration on a firm’s environmental cost performance, as well as the crucial moderating role of digital transformation. It contributes to the growing literature on sustainable supply chain management and provides valuable insights for relevant practitioners.