Green supplier integration and environmental innovation in Chinese firms: The joint effect of governance mechanism and trust

Abstract

AbstractDespite the importance of green supplier integration, how different governance mechanisms affect its influence on environmental innovation is still debated. This article explores the moderating effect of governance mechanisms (i.e., relational norms and contractual control) on the effects of green supplier integration and two dimensions of environmental innovation (i.e., environmental incremental and radical innovation), as well as the moderating roles of trust on the above moderating effects. We examine hypothesized relationships using two‐waved survey data from 206 Chinese manufacturing enterprises. Our results suggest that contractual control positively moderates the impact of green supplier integration on environmental incremental innovation, whereas relational norms negatively moderate this impact. However, both relational norms and contractual control fail to moderate the impact of green supplier integration and environmental radical innovation. Further, trust in supplier strengthens the negative moderating effect of relational norms on the impact of green supplier integration on environmental radical innovation, which reveals the “dark side” of trust in supplier.