Factors Mediating and Moderating the Relationships Between Green Practice and Environmental Performance: Buyer–Supplier Relation and Institutional Context

Abstract

Drawing on social exchange theory and institutional theory, this article extends the literature on sustainable operations by examining the mediating and moderating effects of buyer–supplier relation and institutional context on the relationships among internal green practice, external green practice, and environmental performance. This article analyzes data from 440 firms in three categories of market (the institutional context): industrialized Western, emerging Western, and emerging Asian markets. Both internal green practice and external green practice have positive direct impacts on firms’ environmental performance. More specifically and interestingly, external green practice partially mediates the relationship between internal green practice and environmental performance, and this process is moderated by the quality of the buyer–supplier relation. A higher quality of buyer–supplier relation helps to achieve a better outcome. In addition, the examined relationships vary between the emerging market and developed market: that is, they depend on the institutional context. The findings have implications for both practitioners and policymakers on how to improve environmental performance through leveraging green practice and buyer–supplier relation and what policies on green supply chain management might best be used in different markets.