Effect of Green Supply Chain Management On Financial Performance: Moderating Effect of Institutional Pressure

Abstract

Green supply chain management (GSCM) and environmental sustainability are still believed to be in their early stages in academic and research sectors, particularly in Asian developing countries. This study takes a more comprehensive approach to assessing the impact of GSCM on financial performance indicators, with organizational performance, environmental performance, and corporate reputation serving as mediators. Institutional pressure was used as moderator as different institutional actors are putting pressure to implement Green supply chain management practices. Data was obtained from 301 supply chain personnel in Pakistan's manufacturing industry, and the theoretical model was evaluated using partial least square structural equation modeling. The statistical results of the data collected indicates that GSCM practices have no significant impact on financial performance, but operational performance, environmental performance, and corporate reputation have a strong mediation effect on financial performance. The moderated regression analysis findings show that the presence of institutional pressures enhances the relationship between GSCM and financial performance. These findings indicate that the adoption of GSCM methods in Pakistan can be helpful to businesses, but in the long run in terms of financial performance.