A Relationship between Supply Chain Practices, Environmental Sustainability and Financial Performance: Evidence from Manufacturing Companies in Jordan

Luay Jum’a, Dominik Zimon and Muhammad Ikram
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Luay Jum’a: Department of Logistic Sciences, School of Management and Logistic Sciences, German Jordanian University, Amman 11180, Jordan
Dominik Zimon: Department of Management Systems and Logistics, Rzeszow University of Technology, 35-959 Rzeszow, Poland

Sustainability, 2021, vol. 13, issue 4, 1-20

Abstract: Pursuing sustainable development creates competitiveness for manufacturing firms in the market, however the financial pressure of adopting sustainable environmental practices is still a major concern. Few studies were found on the inter-relationships between supply chain management practices, environmental sustainability, and firm financial performance. Moreover, manufacturing companies are compelled by different pressure groups across the globe to maintain environmental standards while conducting their business and supply chain activities. Therefore, the current study aims to investigate the impact of supply chain practices on environmental sustainability and financial performance. In addition, the role of environmental sustainability as a mediator between supply chain management and financial performance was analyzed to improve sustainable development. A well-designed questionnaire was administered to manufacturing companies in Jordan for data collection. A total of 376 responses were analyzed and the proposed hypotheses were tested by using Structural Equation Modelling (SEM) approach. The results reveal that environmental sustainability was tested significantly and influenced by supply chain practices such as relationship with customers, postponement, level of information sharing, and information quality. Whereas environmental sustainability had a significant direct effect on financial performance. Finally, environmental sustainability mediated the relationship of all supply chain management practices with financial performance except strategic supplier partnership dimension. The study provides policy guidelines to decision makers while simultaneously assists the managers to improve sustainability practices in manufacturing companies.

Keywords: sustainable development; environmental sustainability; supply chain practices; financial performance; manufacturing firms; Jordan (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:13:y:2021:i:4:p:2152-:d:500961

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