The Impact of Internal Environmental Management on Environmental Performance: Assessing the Mediating Role of Open Innovation and Moderating Role of Absorptive Capacity

Abstract

Companies are forced to adopt green supply chain management (GSCM) practices around the globe to satisfy their customers and other stakeholders. As it requires a lot of time and resources to change the existing processes many companies especially small and medium enterprizes (SME's) in the developing countries facing the challenge of their existence. The current study is an attempt to find out a starting point for implementation of GSCM practices to improve environmental performance. To speed up this process a mediating role of inbound open innovation was tested. Similarly to make it sure a moderating role of absorptive capacity was also checked. A survey yielded 98 responses from SME's of Pakistan. A partial least square (PLS), structural equation modeling (SEM) technique is used to confirm reliability, the validity of the proposed constructs first and then test the hypotheses. Results confirm the presence of a full mediation of inbound open innovation between internal environmental management (IEM) practices and environmental performance. Results also yielded a significant negative moderating effect of absorptive capacity on the relationship of inbound open innovation and environmental performance for SME's of Pakistan.

Keywords: Green supply chain management Practices, Internal Environmental Management Practices, Environmental Performance, Open Innovation; Absorptive Capacity