Research Framework for Analyzing the Relationship Between Greening of Suppliers and Green Innovation on Firms’ Performance

In recent years, environmental performance has become part of a company’s strategic value. This is partly attributed by the recent regulatory development in this area. For example the WEEE and RoHS directives were enforced by the European Union to require manufacturers to take recycling (and reuse) and selection of material into design consideration. These initiatives exemplify the importance of green supply chain management. Although companies can make use of green supply chain management to create a competitive advantage by generating more business opportunities, improper management of their supply chain activities in this regard may affect the ability to survival. Greening the suppliers is one of the many approaches to “green” a supply chain. In addition, green innovation can help companies pursue green supply chain management and hence improve environmental performance, as product design and process design are important aspects of any supply chains. Nevertheless, a need exists to develop a model to investigate the relationship between these factors (namely, greening of suppliers, green innovation, environmental performance and competitive advantage). The objective of this paper is to develop a research framework for investigating how future research can address these issues. Hypotheses, constructs, and their measures of the model are discussed.