Radical or incremental? The effects of green innovation on the supply base stability of logistics service providers

Abstract

Logistics service providers (LSPs) are increasingly adopting green innovation to mitigate their environmental impacts. However, little is known about how such innovation influences their supply base stability (SBS), even though supplier inputs are essential for LSPs to meet the requirements of their stakeholders. To narrow this gap, in this article, we draw on recombinant search theory to examine whether LSPs’ incremental green innovation (IGI) and radical green innovation (RGI) exert differential effects on their SBS. By analyzing data from 88 publicly listed Chinese LSPs over the period 2011–2019, this study reveals a positive relationship between IGI and SBS but a negative relationship between RGI and SBS. Furthermore, our findings indicate that top management teams play a critical role in shaping these relationships. In particular, executive environmental attention weakens the positive IGI–SBS association, while executive environmental expertise attenuates the negative RGI–SBS association. Our study extends the operations and technology management literature by uncovering the differential effects of IGI and RGI on LSPs’ SBS and the boundary conditions that alter these effects. LSPs are advised to strategically navigate various types of green innovation to better maintain the stability of their supply bases.