Being good at being good—The mediating role of an environmental management system in value‐creating green supply chain management practices

Abstract

AbstractThis study adopts a resource‐based view to explain the complementary role of the corporate structure in the value creation of green supply chain management (GSCM) practices. Using 8‐year panel data collected from 317 US international manufacturers, we analyze the influence of GSCM practices on corporate financial performance (CFP) and the mediating role of a certified environmental management system (EMS) in this relationship. We show that GSCM practices have a positive impact on accounting‐based financial performance, meaning, return on assets (ROA) and return on equity (ROE). In contrast, firms that implement GSCM practices and a certified EMS simultaneously achieve a higher market valuation in terms of Tobin's Q in addition to a higher ROA and ROE in the following year. Our study demonstrates that, through their synergistic combination with a firm's complementary EMS, utilizing GSCM practices can result in intangible assets as sources of long‐term financial benefits. Our results have several theoretical and managerial implications. They also address the limitations of the prior use of varying survey‐based items for internal and external GSCM practices and add nuance to the existing GSCM practices in the literature.