Sustainable innovation as a catalyst: linking green supply chain practices to corporate reputation in emerging markets

Abstract

This study examines the mediating role of sustainable innovation (SI) in the relationship between green supply chain management (GSCM) practices and corporate reputation (CR) within SMEs specialized in logistics and manufacturing sectors in Saudi Arabia. To address the limited understanding of how SI enhances the link between GSCM and CR, we developed a comprehensive model and validated it using partial least squares structural equation modeling (PLS-SEM). The model’s authenticity was confirmed through rigorous tests of convergent and discriminant validity, composite reliability, and overall goodness-of-fit measures. Data were collected through a cross-sectional survey of 279 valid responses from SMEs identified based on the World Bank’s manufacturing and logistics sectors, with data authentication ensured via thorough screening, pilot testing, and adherence to established reliability standards. The findings reveal that GSCM practices have a significant direct impact on CR and SI. Furthermore, SI positively influences CR and partially mediates the GSCM-CR relationship, as evidenced by substantial R2 values and statistically significant path coefficients. These results underscore the critical role of SI in transforming GSCM efforts into enhanced reputational outcomes. From a practical standpoint, the study highlights the need for managers to integrate SI into their GSCM strategies to achieve both environmental and reputational benefits. Investment in eco-design, resource-efficient technologies, and customer collaboration are vital for fostering innovation and improving public perception. The research also offers theoretical contributions by extending the Resource-Based View (RBV) and stakeholder theory, emphasizing the mediating power of SI in sustainability frameworks.