Unpacking the role of green absorptive capacity in the relationship between green supply chain management practices and firm performance.

Purpose

This study examines green absorptive capacity as an important intervening variable that elucidates the relationship between green supply chain management (GSCM) practices (specifically, green purchasing, customer cooperation and investment recovery) and firm performance.

Design/methodology/approach

Drawing from the theoretical underpinnings of the natural-resource-based view theory and information processing theory, a research model is developed and tested using data obtained from 368 manufacturing firms in Ghana. Data analysis was conducted using structural equation modeling.

Findings

The results indicate that green purchasing, customer cooperation and investment recovery have a direct positive and significant effect on firm performance. Additionally, green purchasing and customer cooperation have a positive and significant effect on green absorptive capacity but investment recovery does not. Further, the results show that the paths from green purchasing and customer cooperation to firm performance are positively mediated by green absorptive capacity.

Practical implications

The study reveals to supply chain managers that green absorptive capacity is an important conduit through which firms can achieve enhanced firm performance from GSCM initiatives.

Originality/value

This study makes a contribution by integrating the absorptive capacity literature and green management literature and establishes green absorptive capacity as a mechanism through which GSCM practices enhance firm performance.