Natural Resource-based View Research Articles

The impact of tourism supply chain on sustainable performance in sub-Saharan Africa: evidence from Tanzania

PurposeThe fast-growth of tourism industry in sub-Saharan Africa (SSA) has increased supply chain activities that harm the environment. Although there are some studies which have investigated the impact of tourism supply chain on sustainable performance, little is known on the side of SSA. Based on the natural resource-based view (NRBV), this study examines the effects of green purchasing, green packaging and reverse logistics on sustainable performance in SSA.Design/methodology/approachThis study applies the structural equation modeling (SEM) to test the conceptual model based on the data collected in mid of 2020 from 167 firms in tourism industry in Tanzania.FindingsThe results demonstrate that green purchasing (GP) has positive effects on environmental performance (EVP) and social performance (SCP). Green packaging (GPa) has positive effects on EVP but no significant influence on SCP. Also, reverse logistics (RL) has positive effects on SCP but no significant influence on EVP. Besides, both EVP and SCP positively influence ECP and mediate the relationships between GP, GPa and RL with ECP.Originality/valueThis study provides a novel framework in sustainable tourism supply chain literature by empirically investigating the relationship between tourism supply chain practices and sustainable performance in SSA.

Environmental, social and governance (ESG) - augmented investments in innovation and firms' value: a fixed-effects panel regression of Asian economies

PurposeHistorically, investments in innovation are perceived as one of the paramount decisions businesses opt to thrive and the impact of such investments on businesses' market performance is well documented in the literature. However, the environmental aspects of making such investments are yet to be addressed by the firms, which in turn, present considerable damage to the environment. Coupling with the natural resource-based view (NRBV) and the stakeholder theory of the firm, this research builds on an earlier work of Khalil and Nimmanunta (2021) in an attempt to examine the link between innovation and firms' environmental and financial value. The authors extend their analysis and document a more consistent approach to measuring environmental innovation which allows the authors to investigate the firms from three additional economies with respect to firms' investments in both traditional and environmental innovations.Design/methodology/approachThe underlying models are tested using the time fixed-effects panel regression by utilizing information from publicly traded companies of ten Asian economies, including Japan, Hong Kong, Taiwan, Thailand, Turkey, Malaysia, Singapore, India, Indonesia, and Saudi Arabia. The reported sample covers annual firm-level ESG data obtained from Thomson Reuters' Datastream and Refinitiv Eikon during the 2015–2019 period.FindingsThis research offers support to the conventional wisdom that innovation is advantageous to the firms' market value. The authors further decompose innovation into traditional innovation and environmental innovation. The findings of this research suggest that traditional innovation is favorable only for the firms' market valuation and traditional innovation is strongly ineffectual for the environment – traditional innovation produces sizeable environmental distress by contributing substantially to carbon emissions. In contrast, the resultant effects of investments in environmental innovation are evident to be instrumental for both firms' financial performance and the environment.Research limitations/implicationsThis research has primarily focused on only two components of a company's environmental performance: reduction in carbon emissions (CO2) and corporate social responsibility (CSR). Given the complexity of firms' environmental strategies and the multidimensionality of the variable, which encompasses a wide range of corporate behavior in terms of relationships with communities, suppliers, consumers, and broader environmental responsibilities broadening the scope of the study by including other important aspects of environmental sustainability is, therefore, critical.Practical implicationsThe findings of this research signify environmental innovation as one of the vital investment approaches as firms can exploit benefits related to the market from firms' sustainable practices, developing eco-friendly processes by introducing steady yet systematic chains of green products and services. Such products and services may have a feature of enhanced functionality with a better layout in terms of improved product life with better recycling options, and lower consumption and exploitation of energy and natural resources. These sustainable practices would be advantageous for the firms regarding the possibility of setting prices above the standard level through establishing green brands and gaining market share of environmentally anxious consumers. For those companies that are striving to take the leading role in the green industry and longing to seek superior returns on the companies' environmental investments, these benefits, in particular, are exceptionally critical to them.Originality/valueThe linkage between firms' financial and environmental performance in the context of simultaneous inclusion of both green and traditional innovations remains unclear and is yet to be investigated by researchers. Thus, this research shed light on the role of environmental innovation and traditional innovation on firms' environmental performance and financial performance. The authors utilize a novel dataset with a clear indication of measuring different elements of innovation that allows us to develop a more robust approach to corporates' environmental, social and governance (ESG) performance metrics having the slightest biases related to transparency and firm size.

Drivers and outcomes of circular economy implementation: evidence from China

PurposeAlthough the circular economy is widely regarded as an essential strategy for firms, the present understanding of the drivers and outcomes of circular economy implementation is underdeveloped. In this paper, the authors draw on the natural resource-based view and information processing theory to explore how an environmental orientation and digital supply chain platforms promote circular economy implementation, and increase the impact of circular economy implementation on financial performance.Design/methodology/approachThe authors surveyed 249 Chinese firms and used hierarchical regression analysis to test hypotheses.FindingsThe empirical results reveal that three primary modes of circular economy implementation—reinvent and rethink (INV), restore, reduce and avoid (RRA), and recirculate (REC)—are all driven by environmental orientation and digital supply chain platforms. More interestingly, digital supply chain platforms have an inverted U-shaped moderating effect on the relationships between environmental orientation and INV and between environmental orientation and RRA. Most importantly, INV and RRA are positively related to financial performance, whereas REC does not have a significant relationship with financial performance.Originality/valueThe authors contribute to the literature on the circular economy by revealing new drivers and outcomes of different modes of its implementation. Additionally, the findings have implications for how firms should frame their circular economy initiatives in the context of the digital revolution.

Environmental performance, political connection, and financial performance: evidence from global oil and gas companies.

Based on the natural resource-based view theory, firms with improved environmental performance will have higher financial performance. Conversely, the neo-classical economic theory argues that improved environmental performance leads to lower financial performance. We argue that these contradicting findings are due to the political connection and treat it as the moderating variable to strengthen the positive effect of environmental performance on financial performance. Using carbon emission, spill volume, and total environmental fines as the environmental performance proxy, we only find that spill volume has a positive relationship with oil and gas companies' financial performance, supporting the natural resource-based view theory. Our results also show the positive effect of political connection on financial performance, supporting the helping-hand theory. Meanwhile, the moderating effect of political connection is only significant in weakening the negative impact of spill volume on financial performance. Practically, government regulation that bans the involvement of politicians in the boards of the oil and gas companies may allow firms to internalize the cost of the environmental damage, and could improve the environmental performance of the firms.

Exploring the circular economy paradigm: A natural resource-based view on supplier selection criteria

The paradigm of circular economy and the transfer of its principles to supply chain management has recently received much attention from researchers and practitioners. Limited natural resources, governmental legislation, and social responsibility for environmental preservation are the main factors for the development of circular supply chains. Especially in the automotive industry, critical materials are used to produce electric vehicles, reinforcing the importance of circularity for the industry. As the first stage of the supply chain, suppliers have a considerable influence on creating self-sufficient production systems, and in the automotive sector, a low level of vertical integration is important. Therefore, selecting suppliers is an enabler for circular supply chains, but this decision is a complex process due to multiple, partly conflicting criteria. To contribute to the knowledge in this research area, this study applies a fuzzy decision-making trial and evaluation laboratory approach for supplier selection in a circular supply chain in a case study of electric vehicles. First, a set of criteria for supplier selection in circular supply chains was identified based on a literature review and was systematically categorized based on the natural resource-based view. Afterward, the criteria were assessed and refined by experts with a strong procurement background in the automotive industry. Second, the experts were interviewed for value collection, and finally, the mutual influence of the criteria was determined. The results show that the most important criteria for circular supplier selection in electric vehicle supply chains are environmental standards, environmental-related certifications, resource consumption, and waste generation. Regarding the natural resource-based view, short-term focused criteria addressing the capability of pollution prevention have a higher importance compared to long-term criteria that drive sustainable development. In addition, this study classifies the criteria into the categories of causes and effects, discusses the prominence of the criteria, and presents a strategic map showing the mutual influences of the criteria. The results contribute to the theoretical and practical discussion on circular supply chains by identifying the key criteria for circular supplier selection and providing decision-making support for procurement managers.

Do Environmental Strategy and Awareness Improve Firms’ Environmental and Financial Performance? The Role of Competitive Advantage

Drawing upon the natural-resource-based view (NRBV), this study assesses the role of environmental strategy (ENS) and environmental awareness (ENA) in enhancing firms’ environmental and financial performance. Additionally, we hypothesize a mediating role of firms’ competitive advantage among these associations. We analyze several hypothesized relationships using survey data from 240 Bangladeshi manufacturing SMEs. The partial least squares structural equation modeling (PLS-SEM) findings suggest that environmental strategy strongly affects organizational competitive advantage and environmental performance. We also observe that environmental awareness substantially affects competitive advantage and environmental and financial performance. Finally, our statistical findings reveal that competitive advantage mediates the linkage between ENS and ENP as well as ENA and ENP. However, ENS was found to have an insignificant effect on firms’ financial performance. These crucial findings extend the NRBV, ENS, and ENA literature. Our research provides managers of manufacturing organizations and policymakers with a valuable model for managing environmental strategy and environmental awareness to enhance environmental and financial performance. It may assist manufacturing SME managers in strengthening their internal resources, such as ENS and ENA, to improve their competitive advantage and organizational outcomes.

The circularity of product-service systems: the role of macro-, meso- and micro-level contextual factors

PurposeThis paper aims to examine the relationships between macro-, meso- and micro-level contextual factors that enable or inhibit the contribution of product service systems (PSS) to circularity. It is informed by the natural resource-based view (NRBV) and the multi-level perspective as theoretical lenses.Design/methodology/approachA theory elaboration approach is used through three in-depth case studies of UK and German manufacturers. Case studies provide use- and result-oriented PSS for personal computers, power tools and wind turbines. Multiple sources of evidence, including 20 semi-structured interviews, company documents and quantitative data, are triangulated to improve the validity of the results.FindingsEmpirical evidence for relationships between macro-, meso- and micro-level contextual factors show significant barriers to the extending and cycling of resource loops, primarily through maintenance, repairs and refurbishment. A firm’s environmental awareness has a determining role in the contribution of PSS to circularity. The evidence from two use-oriented PSS reveals different circularity maturity levels.Originality/valueThis research makes three key contributions. Firstly, it elaborates on NRBV by showing that a firm’s environmental awareness determines product stewardship. The type of product stewardship practices depends on the enabling and inhibiting effects of macro- and meso-level factors. Secondly, it shows that use-oriented PSS have different circularity profiles and proposes three circularity maturity levels. Finally, it provides an empirically validated framework of macro-, meso- and micro-level enablers and barriers and how they interact to enable or inhibit circularity in PSS.

Impact of knowledge absorptive capacity on innovative performance in SMEs: mediating effect of cluster environment

PurposeThis study builds on knowledge-based view (KBV) research and the natural resource-based view of the firm (NRBV) to examine the effect of knowledge absorptive capacity on innovative performance. It also investigates the mediating role of three dimensions of the cluster environment: degree of network, institutional environment and access to factors of production.Design/methodology/approachBy means of partial least squares-based structural equation modelling method, the study validated and analysed the responses of 503 owners and managers of small and medium-sized enterprises (SMEs) in the wood industrial cluster of Cote d'Ivoire, a developing economy.FindingsThe analysis and results reveal that knowledge absorptive capacity strongly predicts cluster environment and innovation performance. Moreover, the cluster environment emerged as a powerful determinant of innovation performance and a mediator of the effect of knowledge absorptive capacity on innovation performance. Unequivocally, institutional support has no significant impact on knowledge absorptive capacity (KAC) and innovative performance mediation relationship and is not a key determinant of innovative performance.Originality/valueThis study offers a key departure from past studies by linking knowledge absorptive capacity to innovative performance and the cluster environment in SMEs. It also extends knowledge concerning the role of KBV, NRBV and relational theory in innovation performance.

A Change Will Do You Good: Does Continuous Environmental Improvement Matter?

Superior corporate environmental performance (CEP) is considered to be an indication of well-managed firms. While previous empirical research has operationalized various environmental measurements, one aspect has remained under-scrutinized, namely, continuous improvement. We examine whether continuous CEP improvement is reflected in aggregated environmental scores provided by sustainability rating agencies. From a natural resource-based view, we investigate the association of continuous CEP improvement with corporate financial performance (CFP). Based on panel data (2005–2020), the results show that continuous CEP improvement is not associated with aggregated environmental scores provided by three major rating agencies. At the same time, however, continuous improvement is positively associated with accounting as well as market-based CFP. The article concludes that continuous CEP improvement is relevant from a materiality perspective, but it is not adequately captured in the environmental scores from rating agencies. Therefore, we propose using a best-in-progress approach as a meaningful investment strategy instead of the established best-in-class screenings.

Promoting sustainable development through strategies, environmental management accounting and environmental performance

AbstractExtant research on environmental management accounting (EMA) has mainly emphasised its impact on environmental disclosures and cost measurements, while the role of EMA in environmental performance has largely been neglected. Hence, the study addressed the literature gap by applying the natural resource‐based view (NRBV) and the dynamic capabilities (DC) theory to investigate EMA as a fundamental managerial innovation mechanism that explains the relationship between environmental strategies and environmental performance. Questionnaires were used to gather data from 145 managers of ISO14001‐certified Malaysian companies. The results of the Partial Least Squares Structural Equation Modelling (PLS‐SEM) analysis demonstrated that EMA mediates the effects of pollution prevention and clean technology strategies on environmental performance but not the effect of the process stewardship strategy. The findings encourage companies to adopt specific environmental strategies to attain better environmental performance through EMA. Moreover, the results highlighted the company limitations in improving environmental performance. The study is one of the first few attempts to integrate EMA with environmental strategies through the application of the NRBV and the DC theory. Additionally, the study provides empirical evidence that efficient EMA management can be transformed into reasonable operational performance and produce positive outcomes.

Modeling the impact of green supply chain practices on environmental performance: the mediating role of ecocentricity

PurposeThis study aims to examine the relationship between green supply chain management (Green SCM) practices and environmental performance, and develop an integrated model to explain the mediating role of ecocentricity on the relationship between Green SCM practices and environmental performance in the context of the Ghanaian downstream petroleum industry.Design/methodology/approachTo address the objectives of the study, a survey had been conducted among companies in the Ghanaian downstream value chain. The paper used the structural equation modeling approach and smart partial least squares (Smart-PLS) analytical tool.FindingsThe study revealed that Green SCM practices had a significant and positive relationship with supply chain ecocentricity and environmental performance. The study further revealed that supply chain ecocentricity significantly mediated the relationship between Green SCM practices and environmental performance.Practical implicationsThe study has developed a new integrated model to enhance oil and gas marketing and distribution company's adaptation and implementation of Green SCM practices.Originality/valueThe study had successfully applied the natural resource-based view and the stakeholder theory in the context of Ghana's downstream petroleum industry. Specifically, these theories had been integrated to form a new model to explain the relationship between Green SCM practices, supply chain ecocentricity and environmental performance in the context of Ghana's downstream petroleum industry. The newly developed integrated model has wider predictability as compared to the individual theories.

Redefining Quality in Food Supply Chains via the Natural Resource Based View and Convention Theory

This study develops and tests a novel product quality framework for food supply chains (FSCs) that addresses sustainability. Issues including climate change, population growth, and the resources required by industrialized agriculture, as well as changing consumer preferences contribute to concerns about the social, ecological, and economic sustainability of FSCs. FSCs, therefore, need to be adapted to address changing supply and demand characteristics. We integrate the natural resource-based view (NRBV) with convention theory (CT) to develop a new set of quality dimensions. Placing social and ecological considerations within the domain of quality management advances theory in two ways. First, while social and ecological considerations are typically peripheral to business models, this framework allows social responsibility and the natural environment to occupy a central place within FSC operations. Second, the framework reflects the fundamentally socially embedded nature of FSCs, including the geographic, historical, and cultural associations of food quality. We then construct a typology of quality conventions and FSCs. We empirically test the typology using a case study methodology with cases from the United States of America (USA). The analysis explores how firms bundle quality conventions across FSCs for competitive advantage. We also find a set of paths through which FSCs transition via exploitation, exploration and organizational ambidexterity to generate competitive advantage, highlighting tradeoffs that may arise as FSCs evolve. These tradeoffs, which relate to maintaining or adapting quality conventions, are practically important because, if not managed appropriately, may result in lower performance and less sustainable FSCs.

CEO Personality Traits and Corporate Environmental Performance

This study examines how chief executive officers’ “Big Five personality traits” (FFM)- conscientiousness, extraversion, agreeableness, openness to experience, and emotional stability - affect corporate environmental performance (CEP). Drawing from upper echelon perspective (UE) and natural-resource-based view (NRBV) of the firm, we argue that FFM traits of CEOs are associated with CEP. Using a sample of 304 CEOs of 276 S&P 1500 firms, we found that CEO conscientiousness, extraversion, and openness to experience are positively related to CEP. We used a novel technique based on linguistic analysis developed by IBM to assess the FFM traits of CEOs. Our study advances the microfoundations of CEP and UE research.

Doing Well by Doing Good: An Operationalization of Closed-Loop Orientation Using CATA

Closed-loop orientation is a strategic orientation to promote circular economy concepts, such as closed-loop supply chains, at the firm level. While linear business models are among the main causes of today’s environmental challenges, such as pollution and depletion of resources, closed-loop supply chains provide a solution by focusing on value recovery. While research confirms that closed-loop orientation is positively linked to firm performance, closed-loop orientation has not been operationalized for secondary, and hence large-scale, longitudinal datasets. Moreover, existing research focuses solely on closed-loop orientation in efficiency-driven economies. In this study, we use computer-aided text analysis (CATA) to operationalize closed-loop orientation for secondary data. We validate our measure by linking closed-loop orientation to firm performance with data from S&P500 firms. We offer three contributions. First, we develop a methodology that enables future scholars to further investigate the nascent research area of closed-loop orientation. Second, we are among the first to extend existing closed-loop orientation research to secondary data. Third, we find evidence that closed-loop orientation is positively linked to firm performance in an innovation-driven economy, adding to the natural resource-based view. These findings encourage practitioners to consider closed-loop supply chains as source for competitive advantage in the face of today’s environmental challenges.

Reshoring for Sustainability: A Multi-Theory Decision-Making Framework

Sustainability has been increasingly recognised as an important consideration for firms in reshoring decisions. Although there are frameworks in the literature that explain the reshoring decision, limited attention has been given to integrating sustainability issues into the analysis, with much of the attention being given to economic factors. This paper integrates environmental, social and economic factors into a reshoring framework through employing the theoretical perspectives of the Natural resource-based view, the Social resource-based view, the Eclectic paradigm and Transaction cost economics. The paper highlights the interdependencies between these perspectives, and adds theoretical depth to our understanding of how social, environmental and economic factors interact to influence the reshoring decision.

Impact of Green Procurement on Purchasing Performance (Special reference to the Apparel Manufacturing Industry in Sri Lanka)

This study will explore the impact of green procurement on purchasing by special reference to the ap-parel manufacturing industry in Sri Lanka. In order to achieve the stated purpose, the researcher devel-oped three research questions, three research objectives, and three hypotheses. Based on institutional theory and natural resource-based view theory, this study constructs a theoretical framework to clarify the mechanisms underlying the relationship between variables. Utilizing a sample of two hundred and fifty-two Sri Lankan professionals from the large-scaled apparel manufacturing sector, a structural model is outlined and tested using structural equation modeling (SEM). The study results demonstrate that green procurement has a positive and significant impact on purchasing performance. Further, the survey result recommended that the relationship between product-based green procurement and pro-cess-based green procurement on purchasing performance was positive and statistically signifi-cant. Consequently, organizations striving to achieve better purchasing performance should focus more on executing green procurement practices. These two kinds of procurement capabilities present two facets of a firm’s practice on green procurement, which complements rather than substitutes each other. The measurements developed in this study can capture the different aspects of purchasing perfor-mance, thus not only enabling use by practitioners to identify the immediate outcomes of it but also to understand its impacts on organizational performance.

How does green intellectual capital affect environmental performance? Evidence from manufacturing firms in Ghana

Purpose Industrialization has contributed to global environmental problems, especially in developed countries, but increasingly so in developing ones as well. Leveraging on the natural resource-based view theory, this study aims to examine the mediating role of environmental consciousness (EC) on the relationship between green intellectual capital (IC) and environmental performance among manufacturing firms in Ghana against a backdrop of increasing national drive towards greater industrialization. Design/methodology/approach This study used a cross-sectional survey design to obtain data from 245 manufacturing firms using purposive sampling technique. Structural equation modelling was used to test for the hypothesized relationships among variables. Findings Evidence suggests that green IC has a significantly positive effect on environmental performance. Furthermore, it was found that green IC has a positive and significant effect on EC, but EC only mediated the relationship between green IC and environmental performance. Practical implications Manufacturing firms within emerging economies like Ghana can improve on their green practices by incorporating these findings in their business models, while research could be guided to focus their inquiries on this and related genre of scholarly work. Originality/value This study is an early-stage study to identify EC as a variable which mediates the relationship between green IC and environmental performance among manufacturing firms in an emerging economy like Ghana.

Interplay between lean management and circular production system: implications for zero-waste performance, green value competitiveness, and social reputation

PurposeThis study explores the interplay between lean management and circular production systems and their implications on zero-waste performance, green value competitiveness and social reputation.Design/methodology/approachQuestionnaire-based survey methodology is used to obtain empirical data from Ghanaian manufacturing SMEs. A multivariate statistical technique, specifically partial least square structural equation modelling is chosen to test the hypothesized relationships.FindingsThe empirical results confirm that lean management is a vital element in moving SMEs towards the implementation of circular production systems. The results also confirm that lean management and circular production systems combine effectively to bring about significant improvement in zero-waste performance, reinforce green value competitiveness and boost social reputation. The results further confirm the mediation role of circular production system between lean management, zero-waste performance, green value competitiveness and social reputation.Originality/valueAnchored on the tenets of the natural resource-based view theory, resource orchestration theory and stakeholder theory, this study proposes an integrated research model that builds new insights into the relationship between lean management, circular production system, zero-waste performance, green value competitiveness and social reputation. The proposed model directs the actions of SME managers in emerging countries to comprehensively evaluate their production processes to equalize the possible compatibility of lean management and circular production systems to meet their zero-waste performance targets, gain green value competitiveness and stimulate social reputation.

Activating Corporate Environmental Ethics on the Frontline: A Natural Resource-Based View

Activating Corporate Environmental Ethics on the Frontline: A Natural Resource-Based View

Sustain or perish: can environmental supply chain strategies predict sustainable performance of manufacturing firms? A third world nation's perspective

PurposeDrawing on the natural resource-based view (NRBV) and dynamic capability perspectives, the current study investigates the extent to which environmental supply chain strategies (ESCSs) predict the dimensions of sustainable performance of manufacturing firms.Design/methodology/approachIn a cross-sectional survey, data were drawn from eight (8) listed manufacturing firms in Ghana: Aluworks Ltd, Unilever Ghana Plc, Fan Milk Limited, Guinness Ghana Breweries Limited, Cocoa Processing Company, Dannex Ayrton Starwin Plc, Benso Oil Palm Plantation Ltd and Samba Foods Ltd. The data from 396 respondents were analysed with partial least square structural equation modelling (PLS-SEM) approach to test the research hypotheses.FindingsThe study revealed that environmental, social and economic sustainability performance reporting indicators were positively and significantly predicted by ESCSs of manufacturing firms in an emerging economy.Practical implicationsIn essence, the results provide broad support to the assertion that sustaining companies over several generations largely depends on understanding and implementing proactive green strategies or otherwise perish.Originality/valueThe study contributes to the few studies that investigate ESCSs and sustainability performance issues in emerging economies, like Ghana, where sustainability is on the verge of gaining momentum.