Expanding the Horizon: An Empirical Study of Sustainable Supply Chain Management and Firm Performance

As global competition is getting more and more intense, there is an increasing trend manifesting the increasing interest in sustainable supply chain management. This study introduces four sustainable supply chain indicators from the upstream (supplier), middle stream (focal firm) and downstream (customer) of a supply chain to empirically examine the relationship between sustainable supply chain performance and firm performance (ROA), as well as the relationship between environmental efficiency and other three indicators. It focuses on the Energy and Utilities industries. In this study we use global firm dataset from Bloomberg professional service, and the number of observation is 86 during 2005 to 2013. We find an inversely U-shaped curve relationship between environmental efficiency in supply chain and firm' s profitability (ROA); and a U-shaped relationship between investments in operational sustainability and firm' s profitability. Also a negative relationship is found between having a new product and ROA. We provide implications obtained from our analysis of regression results for managers. We contribute to the literature by responding to the call for more empirical research in this filed, providing the evidence that sustainable supply chain performance can bring actual benefits for the firm, as long as firms identify their own position accurately and take the right action.