The effect of green supply chain practices on the firm performance: an empirical research

Abstract

Environmental dimensions have been included in every area of life and every activity with the increasing environmental sensitivity and the concern to leave resources for future generations. This strategic path and strategic decisions gained an environmental dimension under the name of green supply chain management and green supplier selection, and attracted great attention in both academic and corporate life. New strategies such as green principles and related environmental performance are imperative and very important for companies, with increasing awareness of environmental issues and increasing concerns for future generations and our world. In order to address the growing environmental concerns of various stakeholders, companies have focused on external partners in the supply chain. The purpose of the current study is to investigate the effect of green supply chain practices on firm performance. To this end, a survey was conducted with the managers of 120 large-scale firms operating in Turkey in order to measure this effect. Explanatory and confirmatory factor analyses, correlation analysis and multiple regression estimators were used in the empirical analysis. Since all items of the Green Supply Chain Applications Scale and Firm Performance Scale had factor loads (>60), all items remained in the analysis. In DFA, item factor weight values with 3 sub-dimensions are in the range (0.73; 0.90). According to these results, the internal and external supply chain practices have a positive and significant effect on all the indicators of firm performance that are reduction of pollutants, reduction of green costs and firm competitiveness. Similarly, reduction of pollutants and reduction of green costs, two indicators of green performance, positively affect firm competitiveness.