Does suppliers’ slack influence the relationship between buyers’ environmental orientation and green innovation?

Abstract

Although researchers have analysed how environmental strategy affects firm competitiveness, they have often overlooked the potential influence at the supply chain level. Building on the resource-based view and the behavioural theory of the firm, this study examines the effect of buyers’ environmental orientation on their green innovation and the influencing role of suppliers’ critical slack resources (i.e., inventory slack, capacity slack, and technology slack). A panel data regression method is used to analyse data on 689 buyer–supplier dyads from Chinese listed manufacturing firms over the period 2008–2019. Our findings suggest that buyers’ environmental orientation is positively related to their green innovation. Suppliers’ capacity slack and technology slack positively moderate this relationship, whereas inventory slack does not. This study contributes to the growing literature on environmental management and supply chain management, and has significant implications for managers.