An institutional theoretic investigation on the links between internationalization of Chinese manufacturers and their environmental supply chain management

Increased market internationalization with more and stricter environmental regulations in different countries has caused manufacturers to extend their environmental management practices to cover their supply chain partners. Thus, environmental supply chain management (ESCM) has become an important competitive and environmental strategy for manufacturers to pursue. China, as a global manufacturer, is also facing this balance of economic development with environmental protection. The literature remains unclear on whether internationalization is beneficial or costly when it comes to environmental management practices such as ESCM within China. Further insight into this issue will be useful for organizations in developing and emergent economies to more effectively prepare for internationalizing their operations and markets. Using internationalization drivers that propel the implementation of environmental management practices in the Chinese manufacturing industry, we applied cluster analysis to group a sample of 377 Chinese manufacturers surveyed in 2007 into three clusters: mature internationalization, emergent internationalization, and domestic-focused. Institutional theory within an internationalization context sets the theoretical foundation for evidence that the international environmentally oriented institutional drivers encountered are positively associated with the adoption of ESCM practices by Chinese manufacturers. We also find significant differences in the environmental, economic and operational performance outcomes across the three manufacturer clusters. We conclude that manufacturing organizations experiencing internationalization with a greater extent of adopting ESCM practices tend to perform better.