The Asian Journal of Shipping and Logistics 33(3) (2017) 167-176

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The Asian Journal of Shipping and Logistics

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The Effect of Environmental Capabilities on Environmental Strategy and Environmental

Performance of Korean Exporters for Green Supply Chain Management *

Hee Sung BAEa

a
Assisant Professor, Tongmyong University, Korea, E-mail:hsbae@tu.ac.kr (First Author)

ARTICLE INFO ABSTRACT

Article history: The objective of this research is to verify the relationships between environmental capabilities,
Received 25 June 2017
environmental strategy and environmental performance. To achieve the objective, this research
Received in revised form 31 August 2017
Accepted 10 September 2017 collects and analyzes 219 data responded by the members of the Korea International Trade
Association. Reliability and validity of the data are tested by an exploratory factor analysis and a
Keywords: confirmatory factor analysis. The relationships between the variables are tested by an analysis of
Environmental Capabilities structural equation modeling. The results are as follows. First, environmental capabilities of Korean
Environmental Strategy exporters have a positive effect on environmental strategy. Capabilities of the firms as an internal
Environmental Performance
resource are based on performing strategy. Firms which have superior environmental capabilities
Korean Exporters
can be possible to make an effort on cooperative environmental improvement among departments
and this is based on environmental collaboration with customers and suppliers. Second, external
environmental strategy of Korean exporters has a positive effect on environmental performance.
Environmental collaboration with customers and suppliers is based on attaining superior
environmental performance. Third, environmental capabilities of Korean exporters have a positive
effect on environmental performance. Environmental capabilities as a strategic resource of the firms
are based on achieving a high level of environmental performance, and the firms can attain a
sustainable competitive advantage in the market. Therefore, environmental capabilities of Korean
exporters have a direct effect of environmental strategy and environmental performance.

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1. Introduction

The research on environment is approached to various viewpoints. There are two viewpoints concerned with environment: one is general

* This Research was supported by the Tongmyong University Research Grants 2016 (2016A029).

http://dx.doi.org/10.1016/j.ajsl.2017.09.006

2092-5212/ 2017 The Korean Association of Shipping and Logistics, Inc. Production and hosting by Elsevier B.V.
Peer review under responsibility of the Korean Association of Shipping and Logistics, Inc.
168 The Effect of Environmental Capabilities on Environmental Strategy and Environmental Performance of Korean Exporters for Green Supply Chain Management

environment of firms (Shrivastava, 1991; Shrivastava and Hart, 1992; departments and externally implement an environmental strategy
Stead and Stead, 1992) and the other is competitive environment (Aragon- connected with suppliers and customers from the viewpoint of green
Correa and Sharma, 2003; Clinton, 1997; McGinnis and Kohn, 1993). The supply chain management. The environmental capabilities are the cause of
research concerned with environment of firms overlooked natural causal ambiguity and social complexity in the relationship with
environment and as a result, the activities of firms are based on serious performance. A tacit resource is focused on human resources or based on
pollution of natural environment (Brown et al., 1994; Chan, 2005; Klassen technology (Hart, 1995; Russo and Fouts, 1997). The resource is
and Whybark, 1999; Meadows et al., 1992; Moon, 2007). From the developed by staff who acquires experience and learns technology
viewpoint, the research concerned with environmental management through performance of rotated work (Barney, 1991).
enhances competitiveness of firms and is based on achieving a sustainable Despite the above results, there are limitations of prior research. First,
competitive advantage. Therefore, the research concerned with prior research did not clearly explain environmental capabilities.
environmental management is needed to perform from the viewpoint of Resources which firms have can be approached to various viewpoints.
sustainability. However, prior research did not classify the characteristics of resources to
Prior research performed from the viewpoint of regulation on grasp the essence and did not analyze the effect of them on an
environment which firms face (Dean and Brown, 1995) but it can be environmental strategy. Therefore, this research has need of analyzing
explained as a strategic viewpoint (Hart, 1995). Firms would change a environmental capabilities and verifying the effect of them on an
threat of environment into an opportunity from the strategic viewpoint on environmental strategy from the viewpoint of resources.
the basis of enhancing internal capabilities. From the viewpoint of green Second, prior research approached an environmental strategy as the
supply chain management, firms change regulatory viewpoints of internal viewpoint of firms. However, an environmental strategy is
environment into strategic viewpoints and share environmental classified into internal viewpoints and external viewpoints of firms from
capabilities as an internal resource with supply chain participants, the viewpoint of green supply chain management. In particular, there is no
followed by sustainable competitive advantages (Reed and DeFillippi, research concerned with an environmental strategy to include suppliers
1990; Teece, 1987; Bae and Lee, 2014). They share the internal and customers which have an influence on environmental performance. In
capabilities concerned with environment with supply chain participants this regard, this research has need of classifying an environmental strategy
and as a result, firms enjoy sustainable competitive advantages in the into internal and external and need to prove whether they have an
market. influence on environmental performance. Therefore, there are three
From the strategic viewpoint, green supply chain management can objectives of this research: one is to verify the effect of environmental
provide firms with the basis of achieving sustainable competitive capabilities on an environmental strategy, another is to investigate
advantages in the market through making internal capabilities, sustainable whether an environmental strategy has a positive effect on environmental
development and entry barriers. Firms can internally make capabilities on performance, and the third is to identify the direct relationship between
green supply chain management through environmental capabilities and environmental capabilities and environmental performance.
externally achieve competitive advantages through environmental
collaboration with supply chain participants. As a result, they can improve
2. Literature Review
environmental performance and firm performance. These capabilities of
green supply chain management can be possible to do sustain green
Resources consist of equipment, finance, technology, patents and
development and they can make entry barriers in the market. Therefore,
brands as capital goods inputted in production processes (Grant, 1991). To
firms can enjoy a monopolistic position in the market through green
understand the characteristics of resources, there are two viewpoints: one
supply chain management (Hart, 1995).
is a separation viewpoint and the other is an integrated viewpoint on the
Prior research verified the positive effect of logistical integration
relationship between resources and organizational capabilities. On the one
(Vachon and Klassen, 2006), buyer green supply chain practices and
hand, on the basis of a natural resource-based view, the boundary of
supplier green supply chain readiness (Lee, 2008), integration for green
resources and capabilities is not defined in prior research (Anderson and
supply chain management (Wong et al., 2015), competitive market
Kheam, 1998). For instance, Barney (1991) insisted that resources are
environment (Hong et al., 2009), customer environmental sensitivity
strategic equipment to improve efficiency and effectiveness and it is
(Menguc et al., 2010) and general and specific organizational capabilities
regarded as assets and capabilities operated by firms. Ghoshall and
(Chan, 2005) on an environmental strategy. In addition, prior research
Bartlett (1990) treated resources with marketing and management
identified that integrated product development and supply chain
capabilities to contribute to a strategy of firms.
coordination (Hong et al., 2009), environmental initiative (Rao, 2002),
On the other hand, Grant (1991) divided resources into internal
cooperation with customers and eco-design (Shukla et al., 2009), adoption
resources and organizational capabilities on the basis of the direct effect
of environmental strategies (Chan, 2005), environmental monitoring
of them on making a strategy. Internal resources of firms are capital goods
(Green et al., 2012), internal and external environmental management
inputted to production processes such as equipment, financial resources,
(Giovanni, 2012), social capital (Lee, 2015) and environmental product
technology, patents, brand and so on. In addition, organizational
policy (Lee, 2012) have a positive influence on environmental
capabilities mean organizational abilities to perform activities and works
performance. Moreover, Moneva and Ortas (2010) found the positive
in firms. In other words, the capabilities are a set of resources to perform
effect of environmental performance on financial performance. The
common works and this means the functions of resources. This means that
results of prior research explain that internal environmental capabilities
resources represent an effective combination of complex human and
are disseminated to suppliers and customers, followed by superior
physical resources to achieve firm performance and it is connected with
performance. The research on environmental strategy can be explained by
whole firms capabilities to conduct their duty. In this regard, resources
a natural resource-based view. Firms which have superior environmental
are regarded as a precedent factor of organizational capabilities and are
capabilities can internally perform an environmental strategy among
 The Effect of Environmental Capabilities on Environmental Strategy and Environmental Performance of Korean Exporters for Green Supply Chain Management 169

recognized as the origin of major competitive advantages. The environmental policy and performance are connected with better
classification of resources and capabilities is found in various strategic economic performance (Klassen and McLaughlin, 1996; Russo and Fouts,
research papers (Amit and Schoemaker, 1993; Henderson and Cockburn, 1997). In addition, Hart (1995) insisted that competitive advantages are
1994; Maritan, 2001). come from firms capabilities which encourage sustainable activities in
To explain a natural resource-based view, Hart (1995) accepted the environmentally.
viewpoint of Grant (1991) concerned with resources, that is; resources are According to Hart (1995), competitive advantages of firms depend on
explained as corporate specific competitive advantages and are treated specific capabilities of them concerned with environmental management
with a precedent factor of organizational capabilities. Judge and Douglas such as sustainable improvement, inter-functional collaboration and
(1998) verified that resources have a positive influence on organizational collaboration with supply chain participants. The capabilities are
capabilities to integrate environmental issues with strategic processes and expanded to physical assets, technology, organizational culture, inter-
this is connected with better firm performance. functional collaboration and invisible resources (Russo and Fouts, 1997).
Resources enhance the development of organizational capabilities Strategic capabilities including processes, systems, networks and cultures
concerned with environment, and each resource has a different role on the for green supply chain management encourage internal collaboration and
basis of the essence of resources when firms develop organizational external collaboration (de Bakker and Nijhof, 2002). The capabilities
capabilities (Russo and Fouts, 1997). For instance, utilization of technical include inter-functional collaboration, collaboration with suppliers,
resources enhances abilities of firms to prevent environmental pollution knowledge and technology concerned with procurement and specific
through reengineering of production processes. Abundant financial policy of procurement (Bowen et al., 2001).
resources increase firms abilities to introduce and use superior equipment If firms capabilities are useful for green supply chain management, the
for pollution control. There are various benefits in firms which have capabilities are based on enhancing collaboration with supply chain
superior equipment for pollution control and environment-friendly participants as well as internal collaboration. Specific green practices of
production systems such as the acquirement of environmental firms in supply chains can become capabilities to provide the basis of
opportunities through enhancing internal capabilities, the improvement of competitive advantages in the market because it is learnt and disseminated
capabilities concerned with environment and the possession of knowledge to partners as well as internal aspects. The capabilities can enhance supply
concerned with environment (Dean and Brown, 1995). chain performance because it is accumulated in internal aspects, absorbed
Firms should make whole involvement and commitment for the as firm-specific assets and disseminated to partners.
effective application of environment-friendly technology. This means that Similarly, to maintain balance between environmental strategy and
firms encourage participation of staff in environmental processes and they legal and systematic regulations, firms have need of a balanced approach
focus on environmental management through human and organizational between external regulations and internal environmental capabilities.
resources. To perform an environmental strategy, top management should Marcus and Geffen (1998) investigated capabilities of pollution
provide staff with a proper education concerned with environment and has prevention as a result of an interactive effect between a learning capability
need to stress environmental management to managers. Therefore, if firms and regulations. Majumdar and Marcus (2001) insisted that firms achieve
have opening and participating culture, it benefits to promote adjustment competitive advantages because they can flexibly treat regulations and
and communication in the inter-corporate level as well as an internal level choose efficient technology. Russo and Fouts (1997) found that invisible
of firms to increase environmental management (Brown and Dray, 1996). assets like capabilities to respond to regulations improve economic
Green supply chain management is connected with the development of performance and development of the industry moderates the relationship
strategic resources on the basis of a natural resource-based view (Bowen, between environmental strategy and organizational performance.
et al., 2001). The strategic resources make possible the implementation of Resources of firms concerned with environmental management make
green supply chain management and as a result, environmental collaborative culture in internal aspects for green supply chain
performance and firm performance are enhanced. Strategic resources to management and enhance environmental collaboration with partners in
create sustainable competitive advantages can be defined as assets, supply chains. The recognition of staff on environmental strategy for
capabilities and organizational processes adjusted by firms which have the green supply chain management gives the support to achieve efficiency of
characteristics of useful, rare, non-substitute and difficult to imitate internal processes and have an important role to acquire effectiveness of
(Barney, 1991). The resources can be divided into human, physical, external processes. Therefore, environmental strategy positively affected
organizational, financial and reputable (Grant, 1991). The development by resources and capabilities of firms enhances environmental
and control of corporate specific resources are accumulated with the performance in inter-corporate aspects as well as internal aspects of a firm,
passage of time. Moreover, the competitive advantages which consist of followed by superior firm performance.
various resources appear in various forms on the basis of firms
recognition on environment. Property-based resources are connected with
3. The Research Model and Methodology
competitive advantages in the stable environment and knowledge-based
resources provide firms with better benefits in the uncertain environment 3.1. The Research Model
(Miller and Shansie, 1996). In addition, there are basic gaps among
internal resources of firms such as technological and human resources and The relationship between the variables come from prior research is
capabilities as a collection of resources added value in the implementation suggested as the theoretical model as follows.
of strategy (Hart, 1995; Bowen et al., 2001).
There are various aspects of the implications in environmental
management. From the strategic viewpoint, environmental performance
and economic performance are affected by strategy because strategic
capabilities provide various competitive advantages for firms. As a result,
170 The Effect of Environmental Capabilities on Environmental Strategy and Environmental Performance of Korean Exporters for Green Supply Chain Management

causal ambiguity and social complexity in the relationship with

performance (Menguc et al., 2010). Therefore, environmental strategy
Internal needs internal environmental collaboration from the viewpoint of
Environmental
Strategy environmental management and external environmental collaboration
including suppliers and customers from the viewpoint of green supply
Environmental Environmental chain management.
Capability Performance
Firms can overcome social pressure concerned with environment
through approaching a natural resource-based view to the strategic
External
Environmental viewpoint and they can achieve sustainable development if they consider
Strategy
environmental issues in strategic processes (Chan, 2005). The
environmental strategy based on a natural resource-based view and green
Fig. 1. The Research Model supply chain management can increase the capability of firms to treat
uncertainty in a point of contact between operations management and
environmental issues and gives the support to develop valuable
3.2. Research Hypotheses organizational capabilities in economically (Banerjee, 2001; Hart, 1995).
Therefore, environmental strategy leads superior environmental
The relationship between the variables is already explained in the performance (Judge and Douglas, 1998; Sharma and Vredenburg, 1998).
literature review and the hypotheses are as follows.
Environmental Capabilities and environmental strategy: Resources H. 2 Internal environmental strategy (H. 2-1) and external
include the capabilities which can use it as well as internal resources environmental strategy (2-2) of Koreans exporters have a positive effect
which firms have. The resources should be approached in the aspect of on environmental performance.
whole resources on the basis of a natural resource-based view rather than
possessing an individual resource in the competitive position of firms Environmental capabilities and environmental performance: Resources
(Wenerfelt, 1984). Prior research is divided into two viewpoints: one is concerned with environment are the important basis of firms activities
the integrated aspect (Aragon-Correa, 1998; Markley and Davis, 2007; (Menguc et al., 2010). The resources are used by staff and are based on
Menguc and Ozanne, 2005) and the other is the separated aspect on the routine concerned with environmental management activities, followed by
relationship between resources and capabilities (Bowen et al., 2001; Hart, superior environmental performance. Capabilities of firms concerned with
1995; Menguc et al., 2010). Prior research verified that resources and environment are tacit, causal vague, firm-specific, social complex,
capabilities have a positive influence on environmental strategy. depending on paths and value added resources on the relationship with
Environmental resources of firms include resources which firms have performance (Menguc et al., 2010). In addition, superior environmental
and capabilities of staff which use the resources. The capabilities can be capabilities have a role of unique resources because of social complexity
explained as organizational specificity based on social complexity and it and causal ambiguity on the relationship with performance (Bae and Lee,
has a positive effect on environmental strategy. Superior environmental 2014). In this regard, environmental capabilities minimize threats in the
resources are used by workers who perform environmental works, and the uncertain environment of management and grab opportunities in the
workers who acquire experience concerned with environment can learn market and as a result, it is based on sustainable development of firms.
and develop the technology. The development of environmental Therefore, firms which have superior environmental capabilities achieve a
capabilities is based on performing various environmental strategies in the high level of environmental performance.
market (Menguc and Ozanne, 2005). Therefore, firms which have superior
environmental capabilities perform various environmental strategies in the H. 3 Environmental capabilities of Korean exporters have a positive
market. effect on environmental performance.

H. 1 Superior environmental capabilities of Korean exporters have a 3.3. Research Methodology

positive effect on internal environmental strategy (H. 1-1) and external
environmental strategy (H. 1-2). The definitions of variables: The objective of this research is to analyze
the relationships between environmental capabilities, environmental
Environmental strategy and environmental performance: Organizational strategy and environmental performance. To achieve the objective, this
specificity based on social complexity has an effect on environmental research uses the conceptual and operational definitions come from prior
strategy. In this regard, the interpretation on environment like research. First, environmental capabilities mean resources concerned with
opportunities and threats has an effect on the scope to adopt environment inputted in production processes such as equipment, finances,
environmental strategy. As a result, the adoption and performance of technology, patents and brands (Grant, 1991). Second, environmental
environmental strategy provide an opportunity which encourages the strategy means the activities that eco-friendly firms spread and
development of firms and minimize an environmental threat in operations. disseminate green knowledge between suppliers and customers as well as
Environmental strategy based on superior capabilities makes internal environmental knowledge from the viewpoint of making new
organizational integration and restructuring in green supply chains, capabilities to achieve efficiency in their processes (Dyer and Singh,
followed by high performance. Environmental strategy makes possible a 1998). Third, environmental performance means the effectiveness of firms
high level of environmental collaboration because of connecting suppliers to coincide with social expectations concerned with environment (Judy
and customers in green supply chains. The strategy makes barriers to and Douglas, 1998). All items are measured as perceptions on a seven
imitation which competitors do not easily imitate because it includes Likert scale. The measuring items are shown in <Table 1>.
 The Effect of Environmental Capabilities on Environmental Strategy and Environmental Performance of Korean Exporters for Green Supply Chain Management 171

Table 1 telephone, facsimile or personal visit. The period of the survey is between
The measuring items of the variables December 2013 and February 2014, and 222 questionnaires were
Operational definitions Ref. collected. There are three questionnaires in problems such as the same
Environmental capability: answers or many missing answers and after removing the questionnaires,
financial support when they perform works concerned with environment 219 data were used in the analysis.
(cap 1) To achieve the objective, this research used various analytical methods.
possession of physical resources such as facilities and equipment First, non-response bias was tested by the method of Armstrong and
concerned with environment (e.g. equipment, cap 2) Overton (1977). It is two steps: one is to divide the questionnaires into
possession of human resources when they perform works concerned with Grant four clusters in an arrived order. If there is a gap between the first cluster
environment (cap 3) (1991) and the fourth cluster, there is non-response bias. Second, the reliability
possession of organizational resources (e.g. having well-established and validity of the items were tested by an exploratory factor analysis
quality control systems, cap 4) (EFA) and a confirmatory factor analysis (CFA). In addition, discriminant
possession of technological resources (e.g. unique technologies to validity is tested by comparison average variance extracted (AVE) with
produce quality products, cap 5) square of a correlation coefficient. If AVE is higher than the square,
enjoyment of good reputation from partners (cap 6) discriminant validity is good. Third, the stability of the data was verified
Environmental strategy: by KMO (Kaiser-Meyer-Olkin, > 0.5) and Bartlett test (p < 0.05). Fourth,
liaison between purchasing and other functions (str 1) the relationship between the variables was analyzed by a correlation
detailed purchasing policies and procedures (str 2) analysis. There are two aims of the analysis. The first is the relationship
including opinions of partners in the goals for environmental between dependent variables and independent variables. If there are high
management (str 3) correlation coefficients, this means that independent variables correlate
technical skills of purchasing professionals (str 4) with dependent variables very well. The second is the relationship
sharing recognition on environmental management among whole staff between independent variables. If there are high correlation coefficients,
(str 5) this means that multicolinearity is doubted. In this case, MAX-VIF (<
the effort to minimize environmental pollution (str 6) 10.0) and tolerance (> 0.1) are tested. Fifth, the relationships between the
achieving environmental goals with suppliers (str 7) variables were tested by an analysis of structural equation modeling. It is
developing a mutual understanding of responsibilities regarding made for investigating the causal relationships between independent
environmental performance with suppliers (str 8) Dyer variables and dependent variables, and the results can suggest the results
working together to reduce environmental impact of our activities with and of the path analysis among the variables. The results are as follows.
suppliers (str 9) Singh
conducting joint planning to anticipate and resolve environmental-related (1998)
4. The Results of an Empirical Test
problems with suppliers (str 10)
making joint decisions about ways to reduce overall environmental 4.1 General Characteristics of responding firms
impact of our products with suppliers (str 11)
close contact with customers to solve environmental problems (str 12) There are the general characteristics of the responding firms on the
considering the effect of environment when goods are delivered to basis of the collected data as follows.
customers (str 13)
sharing information with customers concerned with environment (str 14) Table 2
flexible communication with customers concerned with environment (str
The general characteristics of responding firms
15) Frequency Annual Turnover Frequency
Type of Business
reflecting environmental requirement of customers on goods and services (%) (U$ million) (%)
(str 16) Chemistry and Rubber 19 (8.6) Below 100 13 (5.9)
Electricity/Electronics 22 (10.1) 100-500 28 (12.8)
Environmental performance:
Metal/non-metal 34 (15.5) 500- 1000 26 (11.9)
reduction of air pollution (per 1) Judy
Machine/Transport 29 (13.2) 1000-5000 37 (16.9)
reduction of waste water (per 2) and
Textile/Lather 22 (10.1) Over 5000 40 (18.3)
reduction of solid wastes (per 3) Dougla
Paper/Furniture 10 (4.6) No answer 75 (34.2)
decrease of consumption for hazardous/harmful/toxic materials (per 4) s Beverage 7 (3.2) Staff of Environment Frequency
decrease of frequency for environmental accidents (per 5) (1998) Others 28 (12.8) (%)
improve an enterprise's environmental situation (per 6) No answer 48 (21.9) Below 5 86 (39.3)
Total 219 5-10 26 (11.9)
Methodology: The population is Korean exporters. The sample frame is Over 10 27 (12.3)
a membership list of Korea International Trade Association. The reason is No answer 80 (36.5)
that almost Korean exporters are members of the association. The
responding firms are selected by random sampling. Before the survey, the According to <Table 2>, 219 firms answered the questionnaire and the
firms got a phone call for the survey and if they want, the questionnaire highest number of type of business is metal and non-metal as 34 firms
was sent. The respondent is quality managers or production managers as (15.5%). The result shows that there are various types of business. Annual
factory managers. They have performed environmental management and turnover shows that there are 40 firms (18.3%) in over 5000 million
that is why they are proper to answer the questionnaire. The questionnaire dollars which is the highest. The number of staff concerned with
was collected by the methods which they want such as mail, e-mail, environment shows 86 firms in below 5 persons and it is the highest.
172 The Effect of Environmental Capabilities on Environmental Strategy and Environmental Performance of Korean Exporters for Green Supply Chain Management

Therefore, the responding firms include all kinds of firms from small and Table 4
The results of correlation analysis
medium sized firms to conglomerate.
Variables average S.D. Cap Int Ext Per
4.2 The Results of Reliability and Validity Cap 4.444 1.265 1.000
0.476
The reliability and validity of the measuring items are tested by EFA Int 4.334 1.278 1.000
(0.227)
and CFA. In addition, the relationship between the variables is verified by 0.440 0.812
a correlation analysis and multicollinearity is checked by MAX-VIF and Ext 4.328 1.314 1.000
(0.194) (0.659)
tolerance. The results are as follows. 0.462 0.582 0.635
per 4.440 1.230 1.000
(0.213) (0.339) (0.403)
Table 3 Notes: S.D.: standard division, Cap: environmental capability, Int: internal
The results of reliability and validity
environmental strategy, Ext: external environmental strategy, Per: environmental
EFA results CFA results performance. All coefficients are supported in 1%.
Items
FL R&V B&K FL A CR GF G
Cap 2 0.817 C: KMO 0.726 0.5 10.412 Chi-
0.865 square= According to <Table 4>, the correlation coefficients between
Cap 3 0.792 = 0.716 77 10.185
Cap 4 0.725
E:
0.945 0.761 10.779
265.897 independent variables and dependent variable show high and this means
3.550 Df=
Cap 5 0.722 V:
Bartlet 0.788 11.185 177
that independent variables correlate dependent variable very well.
Cpa 6 0.763 14.791 t test: 0.738 - P=0.000 However, the correlation coefficient between internal environmental
Str 1 0.680 C: chi- 0.8050 0.6 14.167 Q=
strategy and external environmental strategy is high and this means that
Str 2 0.718 0.913 square .811 68 14.520 1.205
E: =4596. GFI= multicollinearity is doubted in the relationship between the independent
Str 3 0.693 0.797 14.356
3.525 0.906
Str 4 0.681 659 0.829 15.213 variables. In this regard, this research analyzes MAX-VIF and tolerance.
V: AGFI=0
Str 5 0.657 Df= 0.843 - .854 Environmental capabilities have 1.307 in MAX-VIF and 0.765 in
14.689
276 CFI=
Str 9 0.684 C: 0.852 0.7 14.456 tolerance, internal environmental strategy has 3.101 in MAX-VIF and
0.935 P= 0.979
Str10 0.753 0.860 05 14.741 0.322 in tolerance and external environmental strategy has 2.972 in MAX-
E: 0.000 NFI=
Str11 0.786 0.850 14.384
5.991 0.940 VIF and 0.336 in tolerance. Therefore, there are no problems in
Str12 0.786 V: 0.833 13.960 IFI=
Str13 0.805 24.963 0.851 14.423 0.940 milticollinearity.
Str14 0.731 0.833 14.091 TLI=
Str15 0.811 0.849 17.832 0.970 4.3 The Results of Empirical tests
RMSEA
Str16 0.677 0.786 -
=0.048
Per 2 0.832 C: 0.858 0.7 14.197
0.935
To achieve the objective of this research, the results are as follows.G
Per 3 0.821 0.864 03 14.454
E:
Per 4 0.829 0.856 14.208
4.733 Table 5
Per 5 0.789 V: 0.833 13.786
The results of hypotheses tests
Per 6 0.673 19.721 0.780 -
Notes: FL: factor loading coefficient, R&V: reliability and validity, B&K: Bartlett H. Path Estimate S.E. C.R. P Result
test and KMO, A: AVE, CR: critical ratio, GF: goodness of fit, C: Cronbachs alpha, 1-1 CapInt 0.660 0.083 7.931 0.000 supported
E: eigenvalue, V: percentage of variance
1-2 CapExt 0.650 0.087 7.462 0.000 supported
2-1 IntPer 0.085 0.068 1.259 0.208 rejected
According to <Table 3>, there are no problems in the results of KMO
2-2 ExtPer 0.424 0.067 6.367 0.000 supported
and Bartlett test. There are good results in eigenvalue and percentage of
3 CapPer 0.248 0.092 2.686 0.007 supported
variance because the former are over 1.0 and the latter are below 50%. In
Notes: Chi-square=593.765, df=221, P=0.000, Q=2.687 GFI=0.818, AGFI=0.772,
addition, the items are divided into four factors. Factor 1 is external GFI=0.912, NFI=0.867, IFI=0.912, TLI=0.899, RMSEA=0.088
environmental strategy including eight items. Item 6, 7 and 8 are deleted
because the factor loading coefficients are below in the criterion (>0.5). According to <Table 5>, environmental capabilities have an influence
Factor 2 is environmental performance including five items. Item 1 is on internal environmental strategy (H. 1-1 supported). Estimate is 0.660
deleted because it has a low factor loading coefficient in the criterion. and critical ratio is 7.931. This means that the hypothesis is supported in
Factor 3 is environmental capabilities including five items. Item 1 is also 1%. Moreover, environmental capabilities have an influence on external
deleted because it has a low factor loading coefficient. Factor 4 is internal environmental strategy (H. 1-2 supported). Estimate is 0.650 and critical
environmental strategy including five items. All factor loading ratio is 7.462. This means that the hypothesis is supported in 1%.
coefficients show over 0.5 and Cronbachs alpha coefficients of the Therefore, H. 1 is supported.
variable show over 0.6. Therefore, the results show that there are no In addition, internal environmental strategy has no influence on
problems in reliability and validity. environmental performance (H. 2-1 rejected). On the other hand, external
As a result of CFA, there is no problem in discriminant validity because environmental strategy has an influence on environmental performance (H.
all coefficients of AVE are over 0.5. In addition, the coefficients are 2-2 supported). Estimate is 0.424 and critical ratio is 6.367. This means
higher than square of a correlation coefficient. The results of fitness index that the hypothesis is supported in 1%. In addition, environmental
show that there is no problem. However, null hypothesis is supported and capabilities have an influence on environmental performance (H. 3
this means that the characteristics of population are different from the supported). Estimate is 0.248 and critical ratio is 2.686. This means that
characteristics of the sample. Therefore, the results can be only applied to the hypothesis is supported in 1%. Therefore, H. 2 is partly supported and
the sample firms. H. 3 is supported. The structural model of SEM is shown in <Figure 2>.
 The Effect of Environmental Capabilities on Environmental Strategy and Environmental Performance of Korean Exporters for Green Supply Chain Management 173

On the other hand, the relationship between internal environmental

strategy and environmental performance did not be verified. This means
that regulations concerned with environment are come from the exterior of
firms on the basis of an institutional perspective and as a result, this
research did not find the relationship between internal environmental
strategy and environmental performance. In addition, prior research
proved that there is time lag in the relationship between strategy and
performance (Flashaw et. al., 2005). Therefore, the unclear relationship
between internal environmental strategy and environmental performance
can be explained by an institutional perspective and time lag.
Fig. 2 The structural model Third, environmental capabilities of Korean exporters have a positive
influence on environmental performance. The causal relationship between
4.4 Discussion capabilities and performance is come from prior research (Hong et al.,
2009; Rao, 2002). Resources of firms can be divided into knowledge-
The results of above analyses are interpreted as follows. First, based resources and property-based resources and in this research,
environmental capabilities of Korean exporters have an influence on environmental capabilities include all of them because the capabilities are
environmental strategy. Prior research has verified the positive inclusive of internal resources and capabilities. The capabilities are treated
relationship between capabilities and strategy (Chan, 2005). Similarly, with strategic resources (Bowen et al., 2001) and are based on creating
this research proved the positive effect of environmental capabilities on sustainable competitive advantages. The development and control of the
internal environmental strategy. Environmental capabilities can be capabilities are connected with strategic resources which are useful, rare,
explained as internal resources of firms, and the resources have a positive non-substitute and hard to imitate because the capabilities are
effect on performing internal strategy concerned with environment. In accumulated with the passage of time. The capabilities are based on
addition, environmental capabilities as the resources are based on enjoying sustainable competitive advantages in the market because the
implementing internal environmental strategy as behavior of firms. Firms capabilities are social complexity and causal ambiguity in the relationship
which have superior environmental capabilities can make a collaborative with environmental performance. Therefore, the relationship between
effort among internal departments to fulfill environmental strategy. The environmental capabilities and environmental performance can be
capabilities become the basis for performing strategy and the relationship explained by a natural resource-based view.
between the variables is explained by a natural resource-based view.
In addition, environmental capabilities of Korean exporters have a
positive influence on external environmental strategy. To perform green 5. Conclusion
supply chain management, firms should include suppliers and customers
in their strategy. To make superior green supply chain management The objective of this research is to verify the relationships between
systems, firms should build internal environmental capabilities firstly and environmental capabilities, environmental strategy and environmental
performance. To achieve the objective, this research ascertains the
then they can make superior external environmental strategy with partners
relationships between the variables and extracts the definitions of the
if the partners have superior environmental capabilities. Therefore, firms
which have superior environmental capabilities can make superior variables through prior research. The questionnaires were sent to Korean
environmental strategy with their partners and the relationship between exporters, and 219 data were used in the analysis. The theoretical
environmental capabilities, and environmental strategy is explained by a implications of the results are suggested in the above discussion and
natural resource-based view. managerial implications, limitations and future research directions are as
follows.
Second, external environmental strategy of Korean exporters has a
The managerial implications of the results are as follows. First,
positive influence on environmental performance. The relationship
between strategy and performance is already verified in prior research managers of Korean exporters should recognize the importance of
(Giovanni, 2012; Shukla et al., 2009). External environmental strategy property-based resources as well as knowledge-based resources to secure
including customers and suppliers is estimated as resources of firms, and resources concerned with environment. Firms which have the superior
firms which have superior environmental strategy achieve a high level of resources can perform superior environmental strategy from the
viewpoints of the exterior as well as the interior. In this regard, managers
environmental performance. Grant (1991) and Hart (1995) insisted that
have need to acquire financial, physical and human resources, to learn
environmental strategy on the basis of capabilities of organizations is
based on superior performance and this is explained by a natural resource- superior environmental technology and to gain a good reputation
based view. The results of this research are also equal to their results; that concerned with environment. Environmental capabilities are based on
is, there is a positive relationship between external environmental strategy performing environmental strategy in Korean exporters and they achieve a
and environmental performance. The collaborative environmental high level of environmental performance through the environmental
strategy.
activities with customers and suppliers are based on superior
Second, managers should include suppliers as well as customers when
environmental performance. Firms which have a collaborative external
environmental strategy can enjoy sustainable competitive advantages in they make environmental strategy because of attaining environmental
the market on the basis of causal ambiguity and social complexity in the performance through external environmental strategy. Managers should
relationship with environmental performance. Therefore, the relationship closely contact with suppliers to minimize the effect of pollution in
between external environmental strategy and environmental performance production processes on environment, to predict and solve environmental
pollution and to minimize environmental problems in products. In
is explained by a natural resource-based view.
174 The Effect of Environmental Capabilities on Environmental Strategy and Environmental Performance of Korean Exporters for Green Supply Chain Management

addition, they should closely communicate with customers to solve (2001), The role of supply management capabilities in green supply,
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