Abstract
In today’s emerging environment sustainable supply chain risks play a vital role in firms’ performance more than ever, because risks tend to disrupt sustainable operations, which ultimately reduces a firm’s performance, but these risks can be managed through supply chain integration practices, which leads to higher firms’ performance. Therefore, this paper examines the relationship between sustainable supply chain risks, supply chain integration, and firm’s financial performance. This study employs 296 survey observations along with financial data of published annual statements to estimate the quantitative causal-effects of three dimensions of sustainable supply chain risks on supply chain integration and financial performance. The findings of the study suggest that sustainable internal business process risks, sustainable supply risks, and sustainable demand risks have a negative relationship with supply chain integration. Furthermore, results of the study explored that all the three supply chain integration practices have a positive impact on firms’ financial performance, which suggests that implementing supply chain integration practices reduces the effect of supply chain risks and increases the firm’s performance.
Highlights
The concept of sustainable supply chain (SSC) emerged and within no time has turned out to be an essential part of supply chain management literature
Results of this study are two-fold; first, they present the connection between sustainable supply chain risk and sustainable supply chain integration and provide the implications for supply chain integration practices and theories
Results show that sustainable supply chain risks are creating barriers for the implementation of sustainable supply chain integration
Summary
The concept of sustainable supply chain (SSC) emerged and within no time has turned out to be an essential part of supply chain management literature. The concept links firms’ supply chains to their main goals that is shareholders wealth maximization and has solid connection to the environmental, social, and economic aspects [1]. Firms turn their supply chain process into sustainable and get more opportunities in the market through competitive advantage, and in turn performance is improved [2]. Rather a new concept circular economy (CE) is often used to aid the sustainable production and consumption, which is a system that mediates firms’ economic and environmental performance through elimination of waste and continuous use of the resources. CE business models is based on reduce, reuse, and recycle, which allows firms in reducing emissions and lowers the consumption of scarce resource [8]
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