Effects of green supply chain integration and green innovation on environmental and cost performance

This paper argues that mechanisms such as information sharing and collaboration used in green supply chain integration (GSCI) to improve information processing capacity can reduce uncertain outcomes of green product and process innovation. Based on data from a survey of Chinese (Hong Kong) firms, the paper tests whether the three dimensions of GSCI (green internal, customer and supplier integration) improve environmental performance and cost reduction by facilitating green product and process innovation. The results show that green customer integration improves cost and environmental performance through green process innovation (not green product innovation). Both green product and process innovations are facilitated by green customer integration (not green supplier integration), while both green customer and supplier integration significantly depend on green internal integration. These suggest that the distinctive information processing capacity created by green internal and customer integration can facilitate the green process innovation required to improve environmental and cost efficiency, while green product innovation and green supplier integration cannot create such efficiencies.