Effect of Green Supply Chain Management Practice on Firm Performance With Mediation of Green Innovation in Ethiopia

Abstract

This study aimed to investigate, via experimentation, the relationship among green supply chain practices and corporate sustainability, with a particular emphasis on the mediating function of green innovation. The relevant 384 respondents were selected from the targeted SMEs using standard random sampling techniques. Using the structural equation model (SEM) and AMOS software, this study investigated the link among green innovation and its mediating impact. The SEM results further supported the notion that green supply chain strategies have a direct influence on green innovation. The results demonstrate that enhanced firm performance is a direct result of growing green innovation. The standardized coefficient of 0.683 approaches statistical significance at p <.01(0.009). The results imply that a greater degree of firm performance was achieved through partial mediation of green innovation. Therefore, policy makers, institutions, non-governmental organizations, and other interested parties should concentrate on providing MSEs with green innovation.