Green supplier selection and environmental performance of firms in the Chinese manufacturing industry: the roles of behavior and outcome controls

Abstract

PurposeGreen supplier selection (GSS) is acknowledged as important governance in green supply chain management (GSCM). However, this paper argues that GSS is not a stand-alone GSCM governance mode that determines manufacturers' environmental performance but rather one that needs to be aligned with contractual governance, particularly contractual control and adaptation, to promote environmental performance effects. This paper adopts GSS as ex ante governance and introduces behavior and outcome controls as ex post contractual control and adaptation, respectively. Thus, this paper addresses how GSS affects environmental performance directly and indirectly through behavior and outcome controls within transaction cost economics (TCE) theory.Design/methodology/approachThis research model was tested on 300 Chinese manufacturing firms, and multiple regression analysis was used to validate our hypotheses.FindingsA direct relationship was observed between GSS and environmental performance. This direct relationship is positively mediated by behavior and outcome controls.Originality/valueThis paper develops and elucidates an integrative green supply chain process proceeding from the implementation of ex ante GSS and ex post contractual governance to the realization of environmental performance. Furthermore, this paper considers two different forms of contractual governance, specifically contractual control and adaptation, and explains how they can be implemented using behavior and outcome controls from the perspective of TCE theory.