The detrimental effect of institutional forces on green innovations and customer cooperation

Abstract

Purpose: This study examines how macro (unpredictable government interventions) and micro (guanxi) institutional forces moderate the effect of firms' green innovations on green customer cooperation (GCC) practices.

Design/methodology/approach: Using a randomized experimental vignette method, the research collected data from 240 managers in China's electronics sector, each presented with realistic supply chain scenarios. We used Multiple regression analyses to analyze data and test our hypotheses.

Findings: The findings indicate that government intervention has a negative influence on the relationship between green innovations and the adoption of GCC (when government intervention is high, the impact of green innovations on the adoption is weaker). Guanxi negatively moderates this relationship as well: at a high level of guanxi, the impact of green innovations on the adoption of GCC is significantly weaker.

Originality/value: Our results highlight the detrimental effects of both macro and micro institutional forces by recognizing their resource-demanding nature. Acknowledging the importance of green customer cooperation practices from a customer-oriented approach, this study extends green innovation and supply chain management literature.