Journal of Robotics, Networking and Artificial Life, Vol. 1, No. 2 (September 2014), 145-149

A Relationship Analysis between Green Supply Chain Management and its Performance:
A Path Analytic Model
Seigo Matsuno*, Shin-ya Tagawa, Yasuo UchidaDept. of Business Administration, Ube National College of Technology, Ube, Yamaguchi 755-8555, Japan

Takao Ito

Graduate School of Engineering, Hiroshima University, Higashi-Hiroshima, Hiroshima 739-8527, Japan*Corresponding author, E-mail: matsuno@ube-k.ac.jp
Tel: +81-836-35-4016, Fax: +81-836-35-4016

Abstract
This paper proposes and empirically tests a model of the relationship between green supply chain management(GSCM) practices and corporate performance. Based on a literature review, we identified five determinants,
namely, environmental commitment, supplier collaboration, supplier assessment, information sharing amongsuppliers, and business process improvement that are used as determinants in a structural model which influenceenvironmental and economic performance. The model was analyzed using the data from a survey of sample ofJapanese manufacturing firms. The results suggest that the degree of supplier collaboration has an influence on theenvironmental performance directly. Meanwhile, the impact of supplier assessment on the environmental
performance is mediated by the information sharing and/or business process improvement. Furthermore, we findpositive relationship between environmental performance and economic performance.
Keywords: Green supply chain management, Corporate performance, Empirical study, Path modeling

1. Introduction
Green supply chain management (GSCM) is an interfirm collaborative initiative concerning environmentalload reduction and environmental preservation
throughout the entire life cycle of a product. Against a
backdrop of an international trend of tightening
regulations on specific chemical substances, as typified
by the Restriction of Hazardous Substances (RoHS)
Directive and/or Registration, Evaluation, Authorization

and Restriction of Chemicals (REACH), as well associal demands for environmental load reduction andpreservation, a heightening of environmental awarenessamong consumers, and other factors, many firms haveengaged in GSCM activities in recent years [1]-[8].
However, along with the pursuit of economic
efficiency throughout the entire supply chain, which is
the main focus of conventional supply chain
management, GSCM also seeks to achieveenvironmental load reduction, and many issues related
to GSCM require investigation, for example,

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examination of cost effectiveness. In addition, thedevelopment of inter-firm information systems andinformation transfer format standardization are urgentlyrequired; REACH in Europe, for instance, requires thecommunication and sharing of chemical substances
information between agents/partners in supply chains.
This paper is organized as follows. In Section 2, we
briefly review some relevant researches about theeffectiveness of GSCM implementation. We analyze thestatus of GSCM implementation at firms in Japan on thebasis of our original questionnaire survey and also
consider the relationship between GSCM practices andperformance, focusing on the role of inter-firm
information sharing in Section 3. Section 4 presents astructural equation model concerning factors that affect
GSCM performance and use path analysis to test thevalidity of the model. Finally in Section 5 we provide
the conclusion of this investigation.
2. Literature review
A previous research concerning effects obtained fromthe implementation of GSCM is the empirical study that
Zhu and Sarkis (2004) conducted on 281 manufacturingfirms in China [7]. They used statistical analysis
methods to test effects that GSCM has on environmental
and economic performance and whether quality control
and JIT activities have a moderator effect onperformance. Although the findings showed that GSCM
implementation has a positive effect on a firm’s
environmental performance, they did not provide
sufficient conclusion to measure whether the effect on
economic performance is positive or negative.
Large and Thomsen (2011) tested the effect that
GSCM has on environmental and purchasing
performance [2]. After identifying factors that affect
GSCM performance on the basis of literature review,
they used survey data on purchasing firms in Germany
to perform structural equation modeling and tested thevalidity of their model. Their findings showed thatgreen supplier assessment and active collaboration havea positive effect on environmental performance, and thatthey are promoted according to the strength of thepurchasing department’s strategic role and commitment
to environmental management. The findings also
indicated that improvement in environmental
performance has a positive effect on purchasing
performance.

In light of the abovementioned previous research, we
engage in further explorative discussion concerning
GSCM practices and performance at firms in Japan,
focusing on the role that inter-firm information sharing
plays in GSCM implementation.
3. Data and analysis
3.1. Outline of the survey
We conducted a mail questionnaire survey from
November 2010 to February 2011 with the research
objective of investigating “the current state and issues insupply chain greening and inter-firm collaboration”.
Since ordinarily the introduction and implementation of
GSCM is likely to be affected by firm size, we studied
Japanese manufacturers with 500 or more employees inthis survey. The number of valid responses obtained
from randomly sampled firms was 126, yielding a
response rate of 25.2% (detailed results are omittedhere) [9][10].
3.2. GSCM implementation and internal management

First, we confirmed the status of implementation ofconcrete inter-firm cooperation activities in GSCM. We
were able to ascertain that many firms provide
information and exchange opinions concerning
environmental regulations and cooperate concerning theprohibition or reduction of use of regulated chemicals
contained in raw materials and components. In addition,
we found that some progressive firms implemented thedetailed GSCM activities cooperate concerning ecodesign and engage in joint research or joint developmentof eco-friendly products or materials with business
partners under inter-firm cooperation and collaboration.
Then, we confirmed the state of development ofinternal management systems for overall environmentalmanagement. On the whole, high scores were obtained
for all questions (based on a 6-point scale), and it wasfound that the introduction of EMS and development oforganizations in charge of environmental management
are particularly advanced. It is likely that this state ofinternal management systems development shows thestrength of overall commitment to environmental
management, including the implementation of GSCM.

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We analyzed what sort of requirements manufacturingfirms have for suppliers concerning implementation ofGSCM and, on the other hand, what sort of assistancethey provide.
We confirmed that many firms have a variety ofrequests for suppliers. For example, request that
suppliers understand each firm’s environmental
philosophy and requiring them to observe a code ofconduct or guidelines. Also, although the scores arecomparatively low, there are firms that conduct on-siteenvironmental inspections of suppliers and engage incontinuous auditing and monitoring, and support thedevelopment of suppliers’ EMS.
3.4. GSCM implementation and information
sharing among firms
Weexamined
thestatusof
information
communication/exchange activities through information
networks among firms.
Information communication/exchange between firms
via information networks occurs mainly with respect toinformation about purchase order placement/receipt orsuppliers/customers, and information about billing,payment, and settlement. At the same time, we foundthat detailed communication/exchange between firms
also occurs with respect to information about
components and measured values of regulated
chemicals.
The background to this is likely progress in
preparations for and compliance with REACH, which
went into effect in June 2007 in Europe. REACH
requires communication and sharing of chemical
substances information between agents in supply chains.
Confirmation for matters such as the presence orabsence and the content of chemical substances subject
to regulation in molded articles is required, as is suchinformation from manufacturers as applications andamount used by application for each chemicalsubstance.
3.5. GSCM implementation and performance
We confirmed awareness among firms of the status ofmatters such as business process improvement
accompanying GSCM implementation. And we
confirmed awareness among firms of improvements inenvironmental and economic performance resulting
from GSCM implementation.
Here, we consider quantitative reduction of various
types of waste, regulated chemicals, and the like to beenvironmental performance, and reduction of variouscosts, such as purchasing and distribution costs, to beeconomic performance. Although it is necessary to also
examine improvement in economic performance on thebasis of financial indicators such as sales and profit
margins, it is generally difficult to eliminate from thesefinancial indicators the impact of factors other than
GSCM implementation. Accordingly, in this paper we
perform analysis in which the concept of economicperformance is limited to the abovementioned cost
reductions.
On the whole, above-average scores are given forboth environmental and economic performance
improvement. However, firms do not enjoy thereduction in purchasing and distribution costs.
4. Path analysis concerning GSCM practices
and performance
In light of the above analysis, we present a structural
equation model concerning factors that affect GSCM
performance [11]. The hypothetical path model isshown in Fig. 1.
Supplier
collaboration

Environmental
commitment

Supplier
assessment

Environmental
performance

Information
sharing amongsuppliers

Business process
improvement

EconomicperformanceFig. 1. Hypothetical path model

The model uses the seven composite variables that isto say, Environmental commitment (5 items), Suppliercollaboration (7 items), Supplier assessment (6 items),
Information sharing among suppliers (3 items),
Business process improvement (3 items), andEnvironmental performance (5 items) as explanatory
variables and Economic performance (4 items) as the

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dependent variable, and assumes a causal chain at
multiple stages. We assume a positive path in all
relationships between the factors.
Next, we provide an overview of the path analysis.
Here, we omit the factor analysis process for examining
the validity of the assumed latent variables and use thevalue obtained by dividing the total of the values of theitems pertaining to each latent variable by the number ofitems. In other words, we use composite scales torepresent the latent variables. Table 1 shows thedescriptive statistics of each variable. For each scale,
Cronbach’s α is greater than 0.8, and reliability (internalconsistency) is high.

supplier assessment, information sharing
suppliers, and business process improvement.

amongSupplier
collaboration
0.31**(R2=0.10**)

Environmental
commitment

0.39**

0.34**

0.43**
Supplier
assessment

Environmental
performance(R2=0.18**)

0.32**

0.37**(R2=0.37**)

0.29*
Information
sharing amongsuppliers(R2=0.16**)

0.19*

Business process
improvement

0.52**(R2=0.50**)
0.39**
Economicperformance(R2=0.65**)* p < 0.05, ** p < 0.01

Table 1. Descriptive statistics of variables(composite scales)
Fig. 2. Approved path model# ofitems

αMean

S.D.

5763354
Note: each score on a 6-point scale

0.93
0.89
0.88
0.81
0.87
0.89
0.86

4.75
3.77
3.64
2.70
3.34
3.48
3.07

0.99
1.03
1.19
1.31
1.05
1.16
1.13

Environmental commitment
Supplier collaboration
Supplier assessment
Information sharing among suppliers
Business process improvement
Environmental performance
Economic performance

We empirically test the path model using thesevariables, performing sequential multiple linear
regression analysis using the standard partial regression
coefficient as the path coefficient.
When we took Environmental commitment, Suppliercollaboration, and Supplier assessment as explanatory
variables and Information sharing among suppliers asthe explained variable, no significant positive path from
Supplier collaboration was found. That is to say, somenon-significant paths were found in the causal chain
between factors that affect GSCM performance.
However, all other paths were significant at the 1% or
5% level. Also, all coefficients of determination weresignificant, and the relationships between factors
assumed in this paper were almost supported (Fig. 2).
5. Conclusion
This paper proposes and empirically tests a model of therelationship between GSCM practices and corporate
performance. We identified five constructs, namely,environmental commitment, supplier collaboration,

The results suggest that the degree of suppliercollaboration has an influence on the environmentalperformance directly. While, the impact of supplierassessment on the environmental performance ismediated by the information sharing and/or businessprocess improvement. And, environmental performance
has a positive impact on economic performance.
Acknowledgments
This research was partly supported by the Japan Society
for the Promotion of Science, Grant-in-Aid for
Scientific Research (C) 24530445 and authors would
like to thank the organization.
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