Unveiling the Role of Green Logistics Management in Improving SMEs’ Sustainability Performance: Do Circular Economy Practices and Supply Chain Traceability Matter?

Abstract

Sustainability has been widely recognized as a pervasive phenomenon that underlies the operations and performance of businesses. Recent research has examined the effect of green logistics management on the sustainability performance of businesses. However, we contend that the relationship between green logistics management and the sustainability performance of firms is not direct but mediated through circular economy practices. We analyze the direct and indirect effects of green logistics management on business sustainability performance via circular economy practices, using the natural resource-based view and resource dependence theory as our theoretical underpinnings. This study also assesses the moderating effect of supply chain traceability on the associations. Drawing upon the empirical data from 211 Bangladeshi manufacturing SMEs, we performed the PLS-SEM technique to assess the hypotheses. The findings show that green logistics management positively affects organizations’ circular economy practices and sustainability performance. Furthermore, supply chain traceability strongly affects SMEs’ circular economy practice but fails to moderate the linkage between green logistics and sustainability performance. Finally, circular economy practice mediates the linkage between SMEs’ green logistics management and sustainability performance. We also conducted the Sobel test to validate the mediation. Our findings advance the natural resource-based view and resource dependence theory while improving the understanding of green logistics management, circular economy practices, and sustainability performance. Given the dearth of literature assessing the complex interactions among these variables, our findings have pivotal implications.