The mediating role of environmental performance between green supply chain management and organizational market performance: Digitalization as a key dimension (In the case of the Ethiopian manufacturing industry)

Abstract

Companies are increasingly exploring green supply chain management practices to integrate environmental considerations into their supply chains. However, little is known about the mediating role of environmental performance between green supply chain management practices and market performance. This research examines the mediating role of environmental performance in the relationship between green supply chain management practices and market performance. Structural equation modeling was employed to test the proposed hypotheses using a sample of 306 companies from a cross-sectional survey. Moreover, an independent sample T-test was also utilized to compare the practice level of two industries. The results indicate that digitalized green supply chain practice and green distribution directly improve firms' market performance, while sustainable packaging, green purchasing, and green manufacturing influence market performance indirectly through environmental performance. The study suggests that the primary driver for integrating digitalization in the Ethiopian manufacturing industry is economic benefits rather than environmental sustainability. Therefore, manufacturing firms should also consider the benefits of digitalization on their sustainability performance. Further, manufacturing firms should not solely expect immediate economic, market, and financial performance improvement from GSCM, but should recognize the long-term benefits that result from improved environmental sustainability.