Regulatory Policy Awareness and Environmental Supply Chain Cooperation in China: A Regulatory-Exchange-Theoretic Perspective

Some developed countries have enacted extended producer responsibility regulations that facilitate the diffusion of environmental supply chain cooperation (ESCC) practices among manufacturers. Developing countries, such as China, have adopted similar but generally flexible and voluntary regulations and policies. Using exchange theory with a focus on regulatory aspects as the theoretical lens, this paper develops propositions to examine if awareness of voluntary environmental regulatory policies is different among manufacturers as well as the relationship to ESCC practices adoption. Results from cluster analysis and multivariate analysis of variance for 308 responses identify three categories of Chinese manufacturers with respect to their awareness of environmental regulatory policies. These three categories include savvy, attentive, and nescient manufacturers. It was found that manufacturers characterized with higher environmental regulatory awareness tend to implement ESCC practices more intensively. Hierarchical regression analysis was further used to examine the relationship between awareness of regulatory policies and ESCC practices. Awareness of domestic regulatory policies has positive effects on green purchasing only for savvy manufacturers. Regression results show a nonlinear relationship between awareness of domestic regulatory policies and customer cooperation with environmental concerns, from slightly positive for nescient manufacturers and slightly negative for attentive manufacturers to significantly positive for savvy manufacturers.