An empirical study of green supplier collaboration in the Chinese manufacturing sector: the double-edged sword effect of guanxi

Abstract

Purpose: Drawing on institutional complexity, this study aims to explore the interaction effect of formal and informal institutional forces on the adoption of green supplier collaboration (GSC) practices by Chinese manufacturing firms. Design/methodology/approach: The paper hypothesises that the effect of the formal institutional forces on GSC in China is influenced by an informal institutional variable, guanxi, which is the interpersonal relationship between employees of the supplier and the manufacturer. To test the conceptual framework, hierarchical moderated regression analyses are conducted using multi-respondent data from 408 randomly sampled manufacturing companies in China. Findings: Guanxi has a double-edged sword effect on the adoption of GSC practices. Specifically, guanxi reduces the negative impact of the perceived costs and the complexity of regulations on the adoption of GSC practices, but it also weakens the positive effect of suppliers’ advice and community pressures on the adoption of GSC practices. Research limitations/implications: Results contribute to supply chain management literature by offering novel theoretical and empirical insights on the Chinese institutional environment governed by both formal and informal institutional variables. Practical implications: Considering guanxi’s double-edged sword effect on the adoption of GSC, manufacturing companies are advised to carefully leverage their guanxi to maintain an institutional and contingent view of the environmental consequences in China. Originality/value: This study empirically examines the effect of formal and informal institutional environments on the adoption of GSC practices in emerging economies.