Reverse logistics innovation, institutional pressures and performance

The purpose of this study is to draw on several perspectives rarely used in reverse logistics (RL) research – such as sustainable development, the natural resource-based view and green innovation – to examine the relationship between RL innovation and environmental and economic performance while incorporating institutional theory to verify how institutional pressures moderate these relationships.

A questionnaire survey is used to investigate Taiwan's electrical, electronic and information industries, as well as maintenance and retail stores selling computers, communications and consumer electronics. First, a hierarchical regression analysis is used. Next, moderating relationships are examined along with the related regulatory, competitor and customer pressures.

The results indicate that RL innovation is positively associated with environmental and economic performance. Moreover, three institutional pressures positively moderated the relationships between RL innovation and environmental performance. However, investment in greater RL innovation under higher-level institutional pressures did not always enhance economic performance.

Reverse logistics innovation comprises five components, one of which is cross-functional integration, the process of obtaining information from marketing, production and logistics managers about how their firms created the marketing-operations interface to better handle RL. However, we obtained RL innovation information only from individual respondents. In addition, this study focuses on the economic and environmental aspects of RL activities. Future studies should apply the RL perspective on social sustainability to probe RL issues from sustainability's environmental, social and economic points of views.

Contrary to the conventional wisdom that RL imposes costs, reduces productivity and curbs competitiveness, this study finds that RL innovation can enrich environmental and economic performances, indicating that firms with more innovative RL capabilities yield more sustainable outcomes for environmental protection, social responsibility and economic performance.

This study contributes to the RL literature by applying multiple perspectives – including sustainable development, the natural resource-based view and green innovation – to explore the relationship between RL innovation and performance while using institutional theory to probe the moderating effects of institutional pressures on RL innovation and performance.