Mediating role of technological innovation on the relationship between green supply chain management and social performance

Abstract

Malaysia is currently seeing significant environmental pollution caused by manufacturing and export activities and heavily affecting the economy, society, and environment. This issue calls for investigation on how environmental sustainability, through technological innovation, can be integrated into current production operations to create a closed-loop system, thereby enhancing social performance. Green supply chain management (GSCM) is gaining attention because of increasing environmental deterioration, such as overflowing landfills, depletion of raw materials, and pollution in general. The purpose of this study is to examine the mediating role of technological innovation on the relationship between GSCM practices and social performance in 258 manufacturing firms in Malaysia certified with ISO 14001. Survey data were analysed using partial least squares structural equation modelling (PLS-SEM). The results revealed that GSCM practices had a significant and positive effect on technological innovation and social performance. Moreover, technological innovation had a positive effect on social performance. Technological innovation also mediated between GSCM and social performance. Therefore, the present paper confirms the positive effect of GSCM on the technological innovation of manufacturing firms, which in turn improves their social performance.