Received: 18 December 2017 Revised: 17 February 2018 Accepted: 11 March 2018

DOI: 10.1002/bse.2060

RESEARCH ARTICLE

External involvement and green product innovation: The

moderating role of environmental uncertainty
Yunhui Zhao1 | Taiwen Feng2 | Hongbo Shi2

1
School of Business Administration, Inner
Mongolia University of Finance and Abstract
Economics, Hohhot, China Although the importance of external involvement has been recognized, under what
2
School of Economics and Management,
conditions it is more effective is still unclear. To address this research gap, this study
Harbin Institute of Technology (Weihai),
Weihai, China explores the moderating roles of three dimensions of environmental uncertainty on
Correspondence the relationship between external involvement and green product innovation based
Hongbo Shi, School of Economics and
Management, Harbin Institute of Technology
on contingency theory and organizational information processing theory. We examine
(Weihai), Weihai, China. the research hypotheses employing survey data collected from 198 Chinese
Email: hbshitwh@126.com
manufacturing firms and using hierarchical moderated regression analyses. The results
indicate that both customer involvement and supplier involvement have positive
effects on green product innovation. Technological uncertainty strengthens the
effects of customer involvement and supplier involvement on green product innova-
tion. However, demand uncertainty fails to moderate the relationship between cus-
tomer involvement and green product innovation, and supply uncertainty fails to
moderate the relationship between supplier involvement and green product innova-
tion. This study provides novel and fruitful research avenues for stakeholder involve-
ment and suggests future directions.

KEY W ORDS

customer involvement, environmental uncertainty, green product innovation, stakeholder

involvement, supplier involvement

1 | I N T RO D U CT I O N involvement as the degree to which customers and suppliers are

Green product innovation addresses environmental issues and is
receiving increasingly attention as a result (Dangelico, 2016; Dangelico,
Pujari, & Pontrandolfo, 2017; Lin, Tan, & Geng, 2013). However, few
firms possess all the resources required by green product innovation
(Huang & Li, 2017). Thus, an increasing number of firms look beyond
their own boundaries to look for resources that might be used to con-
duct green innovation (Dai, Cantor, & Montabon, 2015; Melander,
2017). External involvement helps firms to gain resources and capabil-
ities externally to meet customer demand (Jayaram, 2008; Mishra &
Shah, 2009; Wu, 2013). It is generally acknowledged that involving
external stakeholders is critical in achieving competitive advantages
and performance (Dögl & Behnam, 2015; Feng, Sun, & Zhang, 2010;
Singh & Power, 2009; Taoketao, Feng, Song, & Nie, 2018). From the
perspective of supply chain management, we define external
involved in a firm's green product innovation programs.
This study aims to investigate the impact of external involvement
on green product innovation. One of the fundamental issues in the
external involvement literature is under what conditions it is more
effective (Sousa & Voss, 2008). Despite increasing research interest
in external involvement, previous findings of the impact of external
involvement on performance consequences are confusing. While
some studies found there is a positive impact of external involvement
on performance consequences (e.g., Mishra & Shah, 2009; Singh &
Power, 2009), others reported a nonsignificant or even negative effect
(e.g., Danese & Filippini, 2010; Villena, Revilla, & Choi, 2011).
Conflicting findings regarding the effectiveness of external
involvement maybe due to the lack of consideration for contingency
factors such as environmental uncertainty (EnU), absorptive capability
and strategy (Feng, Sun, Zhu, & Sohal, 2012; Jayaram, 2008). Previous

Bus Strat Env. 2018;1–14. wileyonlinelibrary.com/journal/bse Copyright © 2018 John Wiley & Sons, Ltd and ERP Environment 1
2 ZHAO
studies have identified EnU as a contingency factor which may affect
the effectiveness of interorganizational relationship management
practices (Fynes, de Búrca, & Marshall, 2004; Ragatz, Handfield, &
Petersen, 2002; Tsai, Chou, & Kuo, 2008; Wong, Boon‐itt, & Wong,
2011). Thus, it is critical to consider EnU in studying the impact of
external involvement on green product innovation. Scholars argued
that a firm's practices should be aligned with its environment to obtain
superior performance (Augusto & Coelho, 2009; Miller, 1987). In this
research, we propose that external involvement should be aligned
with EnU to facilitate green product innovation. Therefore, this study
adopted contingency theory (CT) to investigate the impact of external
involvement on green product innovation by considering the
moderating role of EnU.
To better understand and explain the moderating effect of EnU, we
integrate CT and organizational information processing theory (OIPT).
This approach is new in innovation/marketing research, and addresses
a recent call to combine different theory perspectives to investigate
the effectiveness of interorganizational relationship management
practices (Wong et al., 2011). OIPT identifies three essential concepts:
information processing need, information processing capability, and
the fit between information processing capability and need
(Premkumar, Ramamurthy, & Saunders, 2005). In the context of
innovation, information processing need may result from environment
uncertainty and information processing capability may result from the
degree of external involvement (Stock & Tatikonda, 2008). While CT
suggests EnU plays a moderating role in the relationship between
external involvement and green product innovation, OIPT further
provides the theoretical foundation upon which EnU provides a moder-
ating effect (Galbraith, 1973; Srinivasan, Mukherjee, & Gaur, 2011).
According to OIPT, firms should attempt to achieve the fit between
information processing capability and information processing need to
gain superior performance (Galbraith, 1973; Wang, Tai, & Grover,
2013). Uncertainty and dynamic changes in the external environment
may result in high information processing needs for firms (Srinivasan
et al., 2011). Under conditions of high uncertainty, external involvement
is critical for firms to improve information processing capability, which
can help them achieve the fit between information processing capability
and need (Bode, Wagner, Petersen, & Ellram, 2011). Based on OIPT, we
expect that the impact of external involvement on green product inno-
vation will be stronger when a firm faces higher uncertainty.
This research conceptualizes both external involvement and EnU
as multidimensional constructs to explore the impact of external
involvement on green product innovation and the moderating role of
EnU at a more detailed level. We collapse external involvement into
two dimensions—customer and supplier involvement—to enable the
examination of the impacts of different dimensions of external
involvement. Furthermore, we examine three kinds of EnU—demand,
supply and technological uncertainty—which reflect the three main
sources of uncertainty (Chen & Paulraj, 2004; Fynes et al., 2004; Land,
Engelen, & Brettel, 2012). Each dimension of external involvement
might be effective under certain environmental conditions. Thus, the
consideration of multiple dimensions of EnU may help to explain the
mixed findings in previous literature.
We based our research in China for three major reasons. First,
China is experiencing an economic and social transition, and as a result
ET AL.
the formal institutional framework has not been well developed (Li &
Zhang, 2007). External involvement may substitute for insufficient
formal institutions. In addition, institutional underdevelopment in
China lowers trust among organizations (Atuahene‐Gima & Li, 2002).
Thus, information gained from supply chain partners may be more
trustworthy and richer than information obtained by other means.
Second, China is experiencing fast changes in many industries (Shu,
Page, Gao, & Jiang, 2012). As a result, firms in China are exposed to
an uncertain environment. It is therefore necessary to provide
appropriate involvement strategies for firms to survive and prosper
in this volatile environment. Third, although China has achieved rapid
economic growth in the past 30 years, the cost of resources and to
the environment was extremely high (Feng & Wang, 2016). To reduce
pollution and control environmental degradation, the Chinese
Government has tightened environmental regulations. With these
increasingly strict environmental regulations, foreign firms operating
in China are beginning to attach importance to green innovation.
Our findings provide managerial guidelines for these firms.
The theoretical background and research hypotheses are
presented in Section 2, followed by a description of the research
methods. Analysis of the results is shown in Section 4. Finally, we
conclude the study with the major findings, contributions to theory
and practice, limitations and future research directions.
2 | THEORY AND HYPOTHESES
DEVELOPMENT
In this study, it is hypothesized that two dimensions of external
involvement will be positively related to green product innovation.
Furthermore, the relationship between external involvement and
green product innovation will be moderated by EnU. The conceptual
framework is depicted in Figure 1.
2.1 | External involvement and green product
innovation
Reductionism suggests that we should consider a focal firm as an
internal environment, and customers and suppliers as its external
environment (Wong et al., 2011). This approach allows us to
understand how external involvement impacts on internal operations
and how this relationship is affected by EnU. Within a focal firm,
launching green products is a primary objective as firms are facing
increasing environmental pressures (Dangelico et al., 2017; Lin et al.,
2013). However, the success of green product innovation depends
greatly on the inputs from customers and suppliers. Based on OIPT,
external involvement supports external routines and processes that
collect accurate demand and supply information essential for green
innovation (Leal‐Millán, Roldán, Leal‐Rodríguez, & Ortega‐Gutiérrez,
2016). With low degrees of customer and supplier involvement, a
focal firm is more likely to receive inaccurate or distorted information,
which results in a low level of green product innovation.
The importance of identifying and satisfying customer needs to
achieve sustained success has been emphasized in the marketing
literature (Kirca, Jayachandran, & Bearden, 2005; Liao, Chang, Wu, &
ZHAO ET AL.
FIGURE 1 Conceptual model
Katrichis, 2011; Raju, Lonial, & Crum, 2011; Slater & Narver, 1994). By
focusing on customers, firms enhance their market‐sensing and
customer‐linking capabilities, which can lead to superior performance
(Im & Workman Jr., 2004). Because market orientation drives a
continuous and proactive disposition toward responding to customer
needs and emphasizes greater use of customer information, it is found
to be conductive to green product innovation (Chen, Tang, Jin, Li, &
Paillé, 2015). Feng et al. (2012) further identified customer
involvement as an important aspect of market orientation and
suggested that complementary information gained from customers
can inform firms of problems in new product development that they
may have overlooked. Thus, customer involvement is likely to help
firms make changes in the early stage of green product innovation
and avoid wasting time.
Customer involvement provides opportunities for searching
information and solutions in the external knowledge space, which
can help firms to access complementary resources and capabilities
conveniently (Laursen & Salter, 2006; Zhang & Li, 2010). Customer
involvement helps firms obtain the entry ticket to join the richness ties
and networks maintained by other firms (Feng et al., 2010; Mishra &
Shah, 2009). By interacting with a large number of organizations in
the networks, firms can gather information from a wide range of
sources. In addition, customer involvement deepens the relationship
between a focal firm and its customers. Through customer
involvement, manufacturers and customers build up a shared
understanding and common ways of working together, which enhance
the efficiency of green product innovation (Singh & Power, 2009).
Customer involvement can also increase the efficiency of
gathering information related to customer demand and preferences.
Given its extensive networks, customer involvement constitutes
information channels in a supply chain that reduce the amount of time
required for firms to collect information and knowledge (Laursen &
Salter, 2006; Un, Cuervo‐Cazurra, & Asakawa, 2010). Firms
implementing customer involvement may source what they need more
efficiently and thus facilitate green product innovation. Furthermore,
the rapidly sourced knowledge can increase the efficiency of
problem‐solving activities, which further influence green product
innovation (Brunswicker & Hutschek, 2010).
Customer involvement represents a unique type of managerial
resource in China's transition economy (Gouthier & Schmid, 2003).
This is particularly important when we consider that markets in China
3
are not yet well developed (Shu et al., 2012). Customer involvement
can be seen as an important strategy for Chinese firms to overcome
or curtail their resource obstacles (Li & Zhang, 2007). In addition,
China's culture emphasizes reciprocity (Feng et al., 2010). Firms
expect to access demand and preference information from customers
in exchange for favors and obligations (Feng et al., 2010). According to
the reciprocity principle, firms should conduct green product innova-
tion to meet customer demand on eco‐friendly products to maintain
the bilateral relationship. Therefore, we hypothesize that:
Hypothesis 1. Customer involvement has a positive
impact on green product innovation.
Through supplier involvement, firms can conveniently source
information related to green product innovation from their suppliers
(Kang & Kang, 2009). Suppliers usually have greater expertise and
knowledge regarding the specifications, parts and components that
may be essential to a firm's green product innovation (Un et al.,
2010). As a result, supplier involvement can help firms incorporate
the skills, expertise and different perspectives of their suppliers to
improve green product innovation efficiency. Supplier involvement
also allows firms to identify potential technical problems at an early
stage (Feng et al., 2010).
Similarly, supplier involvement can help firms gain information
efficiently (Zhang & Li, 2010). The information gathered from suppliers
can contribute to green product innovation in three major ways. First,
supplier involvement enriches the information pool, and increases the
variety and number of proposed solutions for problem‐solving (Feng
et al., 2010). Second, few firms have all the resources and information
required for green product innovation. Supplier involvement can
complement their competencies and resource bases to tackle
problems occurring in green product innovation (Carr et al., 2008;
Ragatz et al., 2002). Third, firms often have to undergo a period of trial
and error to learn how to gain information from an external source.
Supplier involvement builds up an understanding of the norms, habits
and routines of different channels, and thus firms can gain external
information effectively (Feng et al., 2010).
Supplier involvement also deepens the relationship between a
focal firm and its suppliers (Singh & Power, 2009). Thus, the focal firm
can gain access to limited resources, preferential terms for contracts
and protection from competitors. This is particularly critical in China
as some resources cannot be bought from the market (Shu et al.,
4 ZHAO
2012). In China, some important resources required by green product
innovation cannot be easily bought from its undeveloped market.
However, a firm may obtain these resources from its suppliers in
expectation of a long‐term reciprocity relationship. Thus, we propose:
Hypothesis 2. Supplier involvement has a positive
impact on green product innovation.
2.2 | The moderating role of environmental
uncertainty
Uncertainty has been an important construct in marketing and new
product development research (Cadeaux & Ng, 2012; Chen, Ellinger,
& Tian, 2011). It refers to the inability to assign probabilities to
future events (Beckman, Haunschild, & Phillips, 2004) or the difficul-
ties in accurately predicting the outcomes of decisions (Downey,
Hellriegel, & Slocum, 1975). In the context of a supply chain, EnU
is an inherent condition of interorganizational interactions because
the flow of information involves multiple lines of communication
(Miller, 1987), which makes it difficult to predict the causal
relationships of activities. CT suggests that EnU may moderate the
relationship between external involvement and green product
innovation. In this study, we measure EnU from three different
sources in a supply chain: demand uncertainty, supply uncertainty
and technological uncertainty (Chen & Paulraj, 2004). Demand uncer-
tainty measures the degree of fluctuations and variations in demand.
Supply uncertainty indicates the extent to which suppliers can meet
the requirements of manufacturers and produce materials with con-
sistent quality. Technological uncertainty measures the extent to
which green technology changes within the industry. There are sev-
eral major reasons for considering EnU from these three dimensions.
First, uncertainties across a supply chain are very complicated. To
measure EnU definitively, we simplify a supply chain as a supplier–
manufacturer–customer chain and measure EnU from the perspective
of a manufacturer. Second, because technology and partners may
impose different influences on the manufacturer, the manufacturer
may have different levels of uncertainties associated with technology
and partners. Therefore, we need to measure uncertainties related to
technology and partners separately. Third, because the content of
demand uncertainty is different from that of supply uncertainty, we
have to develop separate measures for demand and supply uncer-
tainty. As such, here demand uncertainty, supply uncertainty and
technological uncertainty reflect the overall level of EnU in the sim-
plified supply chain.
To explain the moderating effects of EnU, we have integrated CT
with OIPT. CT is a very useful theoretical lens to investigate innova-
tion/marketing issues (Li, Chu, & Lin, 2010; Magnusson, Westjohn,
Semenov, Randrianasolo, & Zdravkovic, 2013). From the perspective
of CT, a firm's performance is attributable to the match or fit between
its strategy choices and structures with changing environmental condi-
tions (Miller, 1987; Wong et al., 2011). Thus, firms need to adapt to
their environment through a series of externally oriented strategies
to attain high performance (Kirca et al., 2005). This study posits that
external involvement fits with a high level of EnU to facilitate green
product innovation.
ET AL.
Furthermore, the moderating effects of EnU have also been
informed by OIPT (Wong et al., 2011). A high level of EnU creates
the need to scan the external environment frequently. Under a high
level of EnU, firms should attempt to process additional and rich
information, which increases information processing needs (Koufteros,
Vonderembse, & Jayaram, 2005; Premkumar et al., 2005). Following
OIPT, there is an increasing need to improve information processing
capability to match it with information processing needs resulting
from EnU (Bode et al., 2011; Galbraith, 1973). Thus, this would then
require external involvement efforts to improve information
processing capability to facilitate green product innovation under a
high level of EnU.
To further explain the direction of moderating effects, we
distinguish the different mechanisms in which customer and supplier
involvement affect green product innovation. Demand uncertainty
measures the degree of fluctuations and variations in demand. Green
product innovation is frequently described as an activity of
information processing (Kong, Feng, & Ye, 2016). The main purpose
of involving customers in green product innovation is to utilize their
information in customer demand and preferences. Because a higher
level of demand uncertainty results in higher information processing
needs, greater information processing capability is required by green
product innovation (Bode et al., 2011). Given that the market success
of green product innovation mainly concerns meeting customer needs
and preferences better than competitors (Land et al., 2012), customer
involvement is an important approach to increase information
processing capacity. Therefore, we expect demand uncertainty to
strengthen the impact of customer involvement on green product
innovation because monitoring customer demand continuously and
adjusting innovation plans accordingly are likely to become more
critical when a firm faces higher levels of demand uncertainty (Kirca
et al., 2005; Wong et al., 2011).
By contrast, adjustments are likely to be fewer under conditions
of stable demand in which customer demand and preferences do not
change as much. There is less requirement to improve information
processing needs through customer involvement. Drawing on CT
and OIPT, firms should match their customer involvement with
demand uncertainty when conducting green product innovation
(Wong et al., 2011). As such, customer involvement is likely to be
more strongly related to green product innovation under conditions
of a higher level of demand uncertainty than lower level of demand
uncertainty. Therefore, we propose:
Hypothesis 3. The relationship between customer
involvement and green product innovation will be stron-
ger when the level of demand uncertainty is higher.
Supply uncertainty includes items representing quality, timeliness
and the inspection requirements of the suppliers (Chen & Paulraj,
2004). CT suggests that there is no optimal interorganizational
management practice, but a firm must adapt its supplier involvement
efforts to the contingencies of the external environment (Galbraith,
1973; Srinivasan et al., 2011). Supply uncertainty has been indicated
as one of the most relevant contingent factors because firms have
higher information processing needs when facing higher levels of
supply uncertainty than when facing stable environments (Fynes
ZHAO ET AL.
et al., 2004). In environments with a high level of supply uncertainty,
firms need to involve their suppliers into green product innovation
to ensure the fit between information processing capability and need
(Hult, Ketchen, & Slater, 2004). Conversely, the need for information
processing is reduced when the firm operates in environments with
a lower level of supply uncertainty (Calantone & Rubera, 2012).
Hence, the role of supplier involvement in facilitating green product
innovation is more important when the level of supply uncertainty is
higher. The above arguments lead to:
Hypothesis 4. The relationship between supplier
involvement and green product innovation will be stron-
ger when the level of supply uncertainty is higher.
Firms within industries undergoing rapid technological change are
expected to benefit more from external involvement than those with a
stable technological environment (Slater & Narver, 1994). According
to CT, a firm should adapt its external involvement efforts to the
uncertain technological environment (Galbraith, 1973; Srinivasan
et al., 2011). As suggested by OIPT, technological uncertainty
improves firms' information processing needs (Srinivasan et al.,
2011). Thus, when green technology is changing quickly, the firm must
be able to share information in a timely and frequent manner with
customers and suppliers to achieve the match between information
processing capability and need (Fynes et al., 2004). Customer and
supplier involvement should facilitate green product innovation in
these turbulent environments. Therefore, customer and supplier
involvement may be more critical for green product innovation in
volatile technology environments than in a stable technology environ-
ment due to rapid technological changes (Harmancioglu, Grinstein, &
Goldman, 2010). We overall hypothesize that:
Hypothesis 5. The relationship between customer
involvement and green product innovation will be stron-
ger when the level of technological uncertainty is higher.
Hypothesis 6. The relationship between supplier
involvement and green product innovation will be stron-
ger when the level of technological uncertainty is higher.
3 | RESEARCH METHODS
3.1 | Sample and data collection
We chose firms in the manufacturing industry to eliminate differences
between industries. These firms were from several provinces in China
including Jiangsu, Guangdong, Shandong, Shaanxi and Henan. These
five provinces are appropriate as they represent China's levels of
manufacturing development and market economy. By drawing sam-
ples from a diverse geographic base in China, we minimized potential
regional bias.
The data were collected in three steps. First, we developed a
questionnaire following previous studies (Appendix 1), and then mod-
ified this by consulting with researchers and senior executives to make
it more appropriate to the Chinese context. Before initiating the for-
mal survey, we conducted a pilot test. The pilot study included a small
5
number of randomly selected firms (n = 8). We used this step to
ensure clarity and conciseness of the scale items. Top or middle
managers within these firms were interviewed, and their responses
were excluded from the final analysis. These interviewees were
requested not only to fill out the questionnaire but also to provide
feedback concerning the questionnaire design and wording of items.
Based on feedback from the pilot study, we revised the questionnaire.
The questionnaire was originally prepared in English and then trans-
lated into Chinese. To avoid culture bias, the Chinese version was
back‐translated. The questionnaire was revised until the two transla-
tions showed no substantial diversities in the meanings of the scales
and questions.
Second, to ensure the accuracy and completeness of the
responses, the sampled firms were identified on the basis of recom-
mendations from local universities and government (Feng et al.,
2010). A telephone inquiry was conducted to increase response rate
before the formal survey. If a firm did not involve either customers
or suppliers within its green product innovation, it was deleted from
the sample. To encourage participation, we promised the respondent
a summary report. Finally, questionnaires with a cover letter were sent
to the respondents in 1,000 firms. Two reminder mailings or calls were
made to increase the response rate.
Of 1,000 firms, 212 responses were received. Fourteen returned
questionnaires were discarded due to incomplete responses, which
resulted in 198 usable responses. A response rate of 19.8% is
comparable to other empirical research in this field (Jabbour, Jugend,
Jabbour, Gunasekaran, & Latan, 2015; Shu, Zhou, Xiao, & Gao,
2016). The demographic characteristics of the sample are presented in
Table 1, indicating that they represent a broad range of industries.
One issue raised concerning survey methodology is nonresponse
bias. To check this, we compared the differences in terms of number
of employees, annual sales and total assets between the early and late
responses (Armstrong & Overton, 1977). No statistical differences
were found across the three characteristics, which suggest nonre-
sponse bias is not an issue.
Because data were collected from a single respondent at a single
point in time, common method bias (CMB) might be a threat to the
validity of our findings (Wong et al., 2011). We checked the possibil-
ity of CMB in several ways. First, Harman's one‐factor test of CMB
was conducted (Podsakoff, MacKenzie, Lee, & Podsakoff, 2003;
Podsakoff & Organ, 1986). Harman's one‐factor test revealed six fac-
tors with eigenvalues above or near 1.0, explaining 78.3% of the total
variance. The first factor accounted for only 36.4% of the variance.
Second, confirmatory factor analysis (CFA) for Harman's one‐factor
test was used (Podsakoff et al., 2003). Harman's one‐factor model
yielded χ2 = 1,151.88 with 152 degrees of freedom (compared with
the χ2(137) = 298.49 for the CFA model). The fit indicates several
distinct factors for the variables, which suggests that there is no
CMB problem. As a third statistical test of CMB, the measurement
model was re‐examined by adding a method factor into the CFA
model (Podsakoff et al., 2003). The additional model marginally
improved the model fit indices (Non‐Normed Fit Index (NNFI) by
0.01, Comparative Fit Index (CFI) by 0.01), with the method factor
accounting for very small variances. Thus, CMB is not an issue. To
mitigate the influence of CMB, we also segmented the survey
6 ZHAO ET AL.

TABLE 1 Demographic characteristics of the sample 3.2.3 | Environmental uncertainty

Characteristics of companies Frequency Percentage We used nine items drawn from Chen and Paulraj (2004) to assess
Industry three dimensions of EnU. Example items included “our master
Rubber and plastics 5 2.5 production schedule has a high percentage of variation in demand,”
Textile 6 3.0 “the suppliers consistently meet our requirements” and “our industry
Chemical and related products 14 7.1 is characterized by rapidly changing green technology.”
Nonmetallic mineral products 16 8.1
Metal products 19 9.6 3.2.4 | Green product innovation
Machinery 21 10.6 The four items used to measure green product innovation were
Transport equipment 10 5.1 adapted from Chan, Yee, Dai, and Lim (2016). Sample items included
Electrical machinery and equipment 25 12.6 “improving and designing environmentally friendly packaging for
Communication and computer‐related 32 16.2 existing and new products,” and “recovery of our end‐of‐life products
equipment
and recycling.”
Instruments and related products 18 9.1
Others 25 12.6
Ownership type
3.2.5 | Control variables
State‐owned and collective enterprises 72 36.4 Firm size was adopted as the first control variable. It was measured by
Private enterprises 96 48.5 taking the natural log of the number of employees. Ownership type
Foreign‐investment enterprises 30 15.1 was used as the second control variable. It was defined as two dummy
Number of employees variables, with state‐owned and collective as the base. We also
Large size (2000 or more) 34 17.2 included five industry dummies: metal products; machinery; electrical
Medium size (300–2,000) 47 23.7 machinery and equipment; communication and computer‐related
Small size (<300) 117 59.1 equipment; and instruments and related products. We combined other
Location industries, each having a very small number of observations, and treat
Jiangsu 34 17.2 it as our baseline category. Finally, we controlled industrial region. This
Guangdong 39 19.7 was measured using four dummy variables, with Henan as the base.
Shandong 43 21.7
Shaanxi 46 23.2
3.3 | Reliability and validity
Henan 36 18.2
We first assessed unidimensionality by conducting exploratory factor
questions related to independent, contingency and dependent vari- analysis (EFA) using varimax rotation. EFA resulted in the expected
ables into different sections of the questionnaire (Podsakoff et al., six factors, explaining 78.3% of the total variance. The EFA results
2003). indicate that all the measurement scales are well loaded on their sup-
posed constructs, demonstrating good unidimensionality.
The reliability of the constructs was then assessed using
3.2 | Variables and measures
Cronbach's alpha and composite reliability. As indicated in Table 2,
The survey questions for the multi‐item constructs used seven‐point
Likert scales, ranging from 1 = strongly disagree to 7 = strongly agree. TABLE 2 Construct reliability and validity analysis
We present the specific measurements items of constructs in Item Factor t‐ Cronbach's Composite
Appendix 1. Construct code loading value alpha reliability

Customer CI3 0.88 14.53 0.91 0.92

involvement CI4 0.88 14.55
3.2.1 | Customer involvement CI5 0.81 12.74
To assess customer involvement, we adapted scale items that measure CI6 0.84 13.46

the extent to which firms involve their major customers into green Supplier SI1 0.86 13.65 0.89 0.89
involvement SI2 0.75 11.34
product innovation (Feng et al., 2010). Sample items included “we SI3 0.87 13.95
involve key customer into the green product design and development SI4 0.81 12.57
stage” and “we have continuous green product improvement programs Green product GPI1 0.70 10.31 0.88 0.89
innovation GPI2 0.81 12.61
that include our key customer.” GPI3 0.86 13.80
GPI4 0.86 13.69
3.2.2 | Supplier involvement Demand DU1 0.65 7.05 NA 0.61
uncertainty DU3 0.67 7.21
We adapted four items from previous research to measure the extent
Supply SU1 0.81 11.25 NA 0.83
to which firms involve their major suppliers into green product innova- uncertainty SU2 0.87 12.18
tion (Feng et al., 2010). The respondents indicated, for example, Technological TU1 0.64 8.81 0.81 0.82
whether they “involve key supplier into the green product design uncertainty TU3 0.79 11.38
TU4 0.89 13.14
and development stage.”
ZHAO ET AL. 7

Cronbach's alpha and composite reliability of all the constructs are
greater than 0.60, indicating the reliability of the constructs (Flynn,
Sakakibara, Schroeder, Bates, & Flynn, 1990). The computation of a
Cronbach's alpha for a two‐item construct would be meaningless
(Huo, Selen, Yeung, & Zhao, 2008). The significant correlation coeffi-
cients between the two items of demand uncertainty and supply
uncertainty are 0.43 and 0.71 respectively. As such, reliability is also
ensured for demand uncertainty and supply uncertainty.
Next, the validity of the measurement instruments was assessed.
Content validity was achieved by grounding measurement scales in
the existing literature. We also pretested the measurement scales
before data collection to further ensure content validity. We con-
ducted CFA to test the convergent validity. The overall measurement
model (χ2(137) = 298.49; Root Mean Square Error of Approximation
(RMSEA) = 0.08; NNFI = 0.95; CFI = 0.96; Standardized Root Mean
Square Residual (SRMR) = 0.06) suggests the model was acceptable
(Hu & Bentler, 1999). We found evidence for the convergent validity
of the constructs in the significant loadings of their respective items
in the CFA model (Fornell & Larcker, 1981). The average variance
extracted (AVE) of each construct exceeds the 0.50 threshold, except
for demand uncertainty (0.44). Although the items of demand uncer-
tainty have relatively high error variance, which leads to a relatively
low AVE, we still keep these items because they are very important
for the concept of demand uncertainty (Chen & Paulraj, 2004).
As shown in Table 3, the correlation coefficients of all the con-
structs were below the recommended cut‐off value of 0.9 (Hair,
Anderson, Tatham, & Black, 1998), indicating that multicollinearity
did not inhibit our findings. We also examined the potential
multicollinearity by computing the variance inflation factor (VIF) (Hair
et al., 1998). None of the VIF values exceeds the critical value of 10,
which further demonstrates that multicollinearity is not an issue
(Neter, Kutner, Nachtsheim, & Wasserman, 1996). Table 3 also shows
that the correlations between two dimensions of external involvement
and green product innovation are 0.46 (customer involvement) and
0.37 (supplier involvement) respectively with significances at the
0.001 level, suggesting acceptable criterion validity (Nunnally, 1978).
The results in Table 3 suggest that demand uncertainty is negatively
and significantly related to supply uncertainty. A possible reason for
this is that firms facing a higher level of demand uncertainty are likely
to select suppliers that can provide high‐quality and timely supplies.
We conducted a series of χ difference tests between nested CFA
2
models for all pairs of constructs to check discriminant validity. For each
pair of constructs, we compared the χ2 between the unconstrained
model (with two constructs varying freely) and the constrained model
(with the correlations between two constructs constrained to 1) (Bagozzi,
Yi, & Phillips, 1991). The χ2 differences between the unconstrained and
constrained models are summarized in Table 4. The χ2 differences
between all pairs of constructs are significant at the 0.001 level, thereby
providing evidence of discriminant validity (Bagozzi et al., 1991). Further-
more, as shown in Table 3, the square root of AVE of all the constructs is
greater than the correlation between any pair of them, which further
demonstrates discriminant validity (Fornell & Larcker, 1981).
4 | ANALYSIS RESULTS
Table 5 presents the results of the regression models. Model 1 only
included control variables. Model 2 added the main effects of cus-
tomer involvement and supplier involvement. Models 3a, 4a and 5a
added the moderating variables: demand uncertainty, supply uncer-
tainty and technological uncertainty, respectively. To examine the sub-
tle moderating effects of three dimensions of EnU, we only included
one interaction term in each model. Models 3b, 4b, 5b and 5c added
the interaction terms. Predictor and moderator variables were mean‐
centered before the creation of interaction terms to reduce the poten-
tial influence of multicollinearity (Aiken & West, 1991).
We hypothesized that both customer involvement and supplier
involvement have positive impacts on green product innovation. The
results in Model 2 suggest that customer involvement (β = 0.34,
p < .001) and supplier involvement (β = 0.21, p < .05) are significantly
and positively related to green product innovation. These two predic-
tors account for 23% of the variance in green product innovation.
Thus, both H1 and H2 are supported.
H3 proposes that the relationship between customer involvement
and green product innovation will be stronger when the level of
demand uncertainty is higher. The results in Model 3b suggest that
TABLE 4 Discriminant validity analysis
Constructs CI SI GPI DU SU
Customer involvement (CI)
Supplier involvement (SI) 265.88
Green product innovation 277.76 307.05
(GPI)
Demand uncertainty (DU) 27.84 28.42 48.68
Supply uncertainty (SU) 133.76 132.61 80.94 24.45
Technological uncertainty 151.73 170.61 164.70 29.82 122.88
(TU)
All the χ2 differences are significant at the.001 level.

TABLE 3 Mean, standard deviations and correlations of the constructs

Constructs Mean SD. CI SI GPI DU SU TU

Customer involvement (CI) 4.96 1.05 0.86

Supplier involvement (SI) 5.17 1.09 0.51*** 0.82
Green product innovation (GPI) 4.84 1.02 0.46*** 0.37*** 0.81
Demand uncertainty (DU) 5.28 0.90 0.31*** 0.31*** 0.28*** 0.66
Supply uncertainty (SU) 3.28 0.96 −0.26*** −0.23*** −0.51*** −0.32*** 0.84
Technological uncertainty (TU) 4.48 1.16 0.38*** 0.27*** 0.30*** 0.31*** −0.05 0.78

***Significance at the.001 level; the square root of average variance extracted (AVE) is on the diagonal.
8 ZHAO ET AL.

TABLE 5 Regression analysis results—standardized coefficients

Variables Model 1 Model 2 Model 3a Model 3b Model 4a Model 4b Model 5a Model 5b Model 5c
Control variables
Firm size −0.04 −0.06 −0.08 −0.08 −0.03 −0.04 −0.07 −0.08 −0.07
Private dummy 0.16 0.15+ 0.13 0.12 0.09 0.09 0.14 0.12 0.10
Foreign‐investment dummy 0.01 0.06 0.08 0.08 0.07 0.07 0.07 0.10 0.13
Metal products −0.09 −0.06 −0.06 −0.06 −0.09 −0.09 −0.07 −0.07 −0.07
Machinery −0.06 −0.09 −0.08 −0.08 −0.09 −0.09 −0.09 −0.08 −0.10
Electrical machinery and equipment 0.01 0.04 0.04 0.04 0.03 0.03 0.03 0.01 0.02
Communication and computer‐related −0.08 −0.04 −0.03 −0.03 −0.03 −0.03 −0.03 −0.01 −0.01
equipment
Instruments and related products −0.05 0.01 −0.01 −0.01 −0.01 −0.01 0.01 0.03 0.04
Jiangsu 0.05 0.05 0.04 0.04 0.02 0.02 0.05 0.06 0.05
Guangdong 0.09 0.09 0.08 0.08 0.05 0.05 0.07 0.07 0.07
Shandong 0.06 0.05 0.05 0.05 0.01 0.01 0.05 0.07 0.06
Shaanxi −0.06 −0.03 −0.04 −0.04 −0.07 −0.07 −0.04 −0.03 −0.02
Main effects
Customer involvement (CI) 0.34*** 0.32*** 0.31*** 0.27*** 0.28*** 0.30*** 0.32*** 0.32***
c c c + + c c
Supplier involvement (SI) 0.21 0.19 0.19 0.15 0.14 0.19 0.19 0.18c
+ +
Demand uncertainty (DU) 0.13 0.13
Supply uncertainty (SU) −0.39*** −0.39***
Technological uncertainty (TU) 0.13+ 0.12+ −0.15*
Interaction effects
CI × DU 0.03
SI × SU 0.04
CI × TU 0.17*
SI × TU 0.21**
N 176 176 176 176 176 176 176 176 176
R2 0.05 0.28 0.30 0.30 0.42 0.42 0.30 0.32 0.34
R2 change 0.23 0.02 0.00 0.12 0.00 0.02 0.02 0.04
F(df) change 25.76*** 3.32+ 0.22 36.56*** 0.36 3.12+ 6.06* 10.10**
+
Significance at the .10 level;
*significance at the .05 level;
**significance at the .01 level;
***significance at the .001 level.

the coefficient of the interaction term between customer involvement Figures 2 and 3. In the context of a high level of technological uncer-
and demand uncertainty is positive but not significant (β = 0.03, tainty, the relationship between customer involvement and green
p > .10). Thus, these results do not support H3. H4 proposes that product innovation is positive and significant (β = 0.47, p < .01),
the relationship between supplier involvement and green product whereas in the context of a low level of technological uncertainty it
innovation will be stronger when the level of supply uncertainty is is insignificant (β = 0.15). In the context of a high level of technological
higher. Similarly, the results in Model 4b indicate that the coefficient uncertainty, the relationship between supplier involvement and green
of the interaction term between supplier involvement and supply product innovation is positive and significant (β = 0.36, p < .01),
uncertainty is not significant (β = 0.04, p > .10). Hence, H4 is not
supported.
H5 and H6 propose that the relationships between two dimen-
sions of external involvement and green product innovation will be
stronger when the level of technological uncertainty is higher. The
results in Model 5b (β = 0.17, p < .05) and 5c (β = 0.21, p < .01) dem-
onstrate that both of the coefficients of the interaction terms are pos-
itive and significant. We further examined the details of these two
significant moderating effects following Aiken and West's (1991) sug-
gestions. Regression slope coefficients were estimated at high (one
standard deviation above) and low (one standard deviation below) FIGURE 2 Customer involvement and green product innovation: the
levels of technological uncertainty. The results are reported in moderating role of technological uncertainty
ZHAO ET AL.
FIGURE 3 Supplier involvement and green product innovation: the
moderating role of technological uncertainty
whereas in the context of a low level of technological uncertainty it is
insignificant (β = −0.03). The results of hypotheses tests are presented
in Table 6.
5 | DISCUSSION AND IMPLICATIONS
5.1 | Discussion of the results
Because green product innovation is relatively novel and intricate,
firms should heighten their capabilities via collaborating with external
stakeholders (Wu, 2013). However, the inconsistent findings in the lit-
erature call for further examination of the influence of external
involvement on green product innovation (Feng et al., 2010; Singh &
Power, 2009; Villena et al., 2011). This study collapses external
involvement into two dimensions and explores its impact on green
product innovation. The positive relationships between the two
dimensions of external involvement and green product innovation
are consistent with those of previous research that illustrated the ben-
efits of involving supply chain partners into environmental issues (Dögl
& Behnam, 2015; Wu, 2013). Thus, this study reinforces the need to
collaborate with external customers and suppliers to achieve the suc-
cess of green product innovation.
Although the importance of external involvement has been recog-
nized, managers are often unclear as to what order to implement cus-
tomer and supplier involvement (Singh & Power, 2009; Sun, Yau, &
Ming Suen, 2010). To implement external involvement, firms should
devote a great number of resources to make the best use of informa-
tion and knowledge available from customers and suppliers. Thus,
implementing customer and supplier involvement may be costly in
time and money. To achieve expected results, firms should determine
an appropriate order of customer and supplier involvement according
TABLE 6 Results of hypotheses tests
Hypotheses
H1: Customer involvement has a positive impact on green product innovation
H2: Supplier involvement has a positive impact on green product innovation
H3: The relationship between customer involvement and green product innovation will be stronger when demand uncertainty is higher
H4: The relationship between supplier involvement and green product innovation will be stronger when supply uncertainty is higher
H5: The relationship between customer involvement and green product innovation will be stronger when technological uncertainty is higher Supported
H6: The relationship between supplier involvement and green product innovation will be stronger when technological uncertainty is higher Supported
9
to their situations and conditions (Feng et al., 2010). Our results indi-
cate that the impact of both customer involvement and supplier
involvement are significant. Although customer involvement (0.34)
has a greater impact on green product innovation than supplier
involvement (0.21), further tests suggest that this difference is not sig-
nificant (p > .05). Thus, both customer and supplier involvement are
important in facilitating green product innovation. As illustrated in
Table 3, the degree of supplier involvement is higher than customer
involvement in the context of green innovation. Considering the
equally important roles of customer involvement and supplier involve-
ment in green product innovation, firms should make efforts to
improve customer involvement first.
Although the value of external involvement has been recognized,
the previous literature lacks a theory which can explain why in some
instances EnU has no effect on the relationship between external
involvement and green product innovation, whereas in others the rela-
tionship between external involvement and green product innovation
could be strengthened or weakened under the influence of EnU. The
findings in this study confirmed that such complex relationships can
largely be explained by combining CT and OIPT. Similar to Wong et al.
(2011) work, which argues external input and collaboration are more
important when facing higher technological uncertainty, our results
indicate that both customer and supplier involvement have greater
impacts on green product innovation under a higher level of technolog-
ical uncertainty. This is consistent with arguments of CT and OIPT,
which suggest the need to involve external customers and suppliers to
improve information processing capability for achieving the fit between
information processing capability and need (Bode et al., 2011; Wang
et al., 2013; Wong et al., 2011). The results further support the interor-
ganizational relationship management literature, which argues for the
importance of cooperation and information sharing among firms as
the foundations for improving performance (Andersen & Kragh, 2013;
Fynes et al., 2004). Such foundations will encourage customers and sup-
pliers towards green product innovation when a focal firm faces a high
level of technological uncertainty. We also interviewed 11 executives
from industries such as home appliances, semiconductors and mobile
phones to further confirm these explanations. These industries were
selected because of the higher level of EnU they are facing. These
executives also suggested that the need to involve major customers
and suppliers into green product innovation is stronger when facing a
higher level of EnU. Thus, firms need to involve customers and suppliers
into their green product innovation process to ensure its market suc-
cess, especially when facing a high level of technological uncertainty.
However, the moderating effect of demand uncertainty on the
relationship between customer involvement and green product
Outcome
Supported
Supported
Rejected
Rejected
10
innovation, and the moderating effect of supply uncertainty on the
relationship between customer involvement and green product inno-
vation are not supported. To gain an in‐depth understanding of these
counterintuitive results, we conducted further interviews with man-
agers in Chinese manufacturing firms to identify contextually embed-
ded explanations. For the insignificant moderating effect of demand
uncertainty, interviewees explained that it is relatively easy to respond
to customer needs when demand uncertainty is lower. In this case,
there is not as much need to come into close interaction with cus-
tomers. However, in the case of higher demand uncertainty, current
customers might hold the firm hostage/captive and make it more dif-
ficult to make groundbreaking innovations. A possible interpretation
for the insignificant moderating effect of supply uncertainty is that a
firm facing higher supply uncertainty is dependent on suppliers that
are not necessarily able to meet the requirements raised by the chang-
ing environment. Thus, problems that result in failed green product
innovation may emerge. Another possible explanation is that although
external involvement is important, internal integration is required to
support information and resource sharing and problem solving among
different functions to facilitate green product innovation. Several
scholars have also suggested that internal integration plays a signifi-
cant role in ensuring coordination and reducing misunderstanding
among internal functions to improve information transmission effi-
ciency (Atuahene‐Gima, 2003; Hoegl, Weinkauf, & Gemuenden,
2004).
Furthermore, three dimensions of EnU directly affect green prod-
uct innovation in different ways. The results suggest that demand
uncertainty and technological uncertainty are positively related to
green product innovation while supply uncertainty is negatively
related to green product innovation. These results reinforce the com-
monsense idea that extra attention should be focused on facilitating
green product innovation in volatile demand and technological envi-
ronments (Souder, Sherman, & Davies‐Cooper, 1998). However, it is
likely to be difficult for firms to conduct green product innovation
when the level of supply uncertainty is higher. We also examine the
effects of two‐ and three‐way interactions between the three dimen-
sions of uncertainty on green product innovation. The results indicate
that only the effect of the three‐way interaction is significant. How-
ever, investigating the interactional effects is not the focal point of
this study.
5.2 | Contribution to theory
This study contributes to the existing body of knowledge on external
involvement in three important ways. First, it adds to our understand-
ing of the value of external involvement. Because external involve-
ment efforts concern costs (Feng et al., 2010) and risks (Ertimur &
Venkatesh, 2010), it is important to understand precisely how to con-
duct external involvement effectively under specific environmental
conditions. By conceptualizing external involvement and EnU as mul-
tidimensional constructs, this study allows us to develop a comprehen-
sive model and theory of the effects of external involvement on green
product innovation.
Second, our findings on the moderating effects contribute to the
literature on external involvement and EnU. As Wong et al. (2011)
ZHAO ET AL.
and Kirca et al. (2005) have indicated, we should integrate innova-
tion/marketing practices and EnU into one framework because firms
may adapt their practices with changing environments. The findings
confirm that under different types of uncertainties, different degrees
of external involvement efforts should be made to facilitate green
product innovation. In this regard, this study provides one paradigm
for interdisciplinary studies on interorganizational relationships and
green product innovation.
The third contribution lies in the approach, in which we integrate
CT and OIPT. OIPT allows us to demonstrate the benefit of viewing a
focal firm and its environment from an organizational information pro-
cessing perspective (Galbraith, 1973; Premkumar et al., 2005;
Srinivasan et al., 2011), and the importance of understanding the dis-
tinct mechanisms by which customer and supplier involvement affect
green product innovation. Organizational information processing logic
serves as the basis to develop the contingency effects of three dimen-
sions of EnU, which were previously not empirically examined in the
external involvement literature (Srinivasan et al., 2011). Such a novel
approach provides the much needed logical arguments to explain
why the profits of green product innovation might be more pro-
nounced under certain environmental conditions (Kirca et al., 2005;
Ragatz et al., 2002; Wong et al., 2011).
5.3 | Managerial implications
In terms of implications for managerial practice, this study moves the
understanding of managers on external involvement a step forward.
First, because achieving external involvement is a complicated and
challenging issue for managers, they should use a holistic perspective
to manage their supply chain partners when innovating green prod-
ucts. A basic question that managers often encounter is: Should we
implement customer and supplier involvement simultaneously or indi-
vidually to achieve the success of green product innovation? Our find-
ings suggest that both customer and supplier involvement are
important. Considering the relatively low level of customer involve-
ment, Chinese firms should first strive to improve the level of cus-
tomer involvement.
Second, because external involvement is likely to increase the
cost of green innovation efforts, it may not be simply a case of
more‐is‐better (Feng et al., 2010; Souder et al., 1998). This study
equips managers with theories and supporting evidence which explain
why their external involvement efforts to cope with a high level of
EnU do not always bring about desirable performance outcomes. By
investigating the moderating effects of three dimensions of EnU,
managers can now understand that both customer and supplier
involvement are paramount in facilitating green product innovation
under a higher technological uncertainty. This means that managers
should focus on investment in external involvement to facilitate green
product innovation, because this performance is sensitive to input and
collaboration with customers and suppliers, especially under a higher
technological uncertainty. However, there is no need to increase the
levels of customer and supplier involvement when demand uncer-
tainty and supply uncertainty are higher, because the relationship
between external involvement and green product innovation is not
influenced by these two types of uncertainties. Managers with such
ZHAO ET AL.
knowledge will be more competent in allocating investment in external
involvement.
Third, to facilitate green product innovation, the measures of cus-
tomer and supplier involvement depicted in Appendix 1 may help
managers define specific actions to be taken. For example, a firm can
involve its key customer into the green product design and develop-
ment stage. These measurement items provide managers with detailed
specifications and serve as a useful tool for managers to implement
customer and supplier involvement effectively. They can also help
firms to minimize the possibility of involvement failure by addressing
these major dimensions before involving customers and suppliers into
green product innovation programs.
6 | CONCLUSION AND LIMITATIONS
This study add to the external involvement research by developing
theories and providing empirical evidence to explain the moderating
role of EnU in the relationship between external involvement and
green product innovation. Integrating CT and OIPT, this study
develops a novel approach to explain the complex relationships among
external involvement, green product innovation and EnU. With this
approach, we are able to explain how and why the impact of certain
external involvement dimensions on green product innovation can
be strengthened (or weakened). In addition, such an enhanced under-
standing lays the groundwork to expand external involvement
research into exploring different means of reducing or mitigating the
impacts of EnU, and the understanding of other contextual factors.
While our study makes a significant contribution to both theory
and practice, there are some limitations, and these may indicate future
research opportunities. First, it can be argued that the perceptions of
external involvement in this study are somewhat one‐sided in that
they represent the perspectives of manufacturers and ignore the
perspectives of customers and suppliers. This limitation implicitly
suggests a significantly different research design based on the
relationship dyad. Future research should investigate external involve-
ment concurrently from the views of suppliers, manufacturers and
customers to gain more fruitful insights.
Second, we test the hypothesized relationships using cross‐sectional
data. However, the relationships among external involvement, EnU and
green product innovation are rather multifaceted and complicated.
Although more theory building and testing are required, longitudinal and
case studies are recommended to fully and comprehensively understand
the mechanisms behind the external involvement/green product innova-
tion relationship and the contingency effects of other contextual factors.
Third, we attempt to explain the value of external involvement under
the contingency effects of EnU, but EnU is not the only contingency fac-
tor influencing the relationship between external involvement and green
product innovation. Although green product innovation is important in
such a dynamic environment, other performance outcomes might also
be influenced by external involvement. Future studies may extend our
research model by exploring other contingency factors, such as organiza-
tional culture, time of involvement and innovation type (radical or incre-
mental innovation) as well as other performance consequences, such as
innovation cost, delivery and flexibility.
11
ACKNOWLEDGEMENTS
This research was partially supported by the National Natural Science
Foundation of China (No. 71702148, No. 71662022), the Humanity
and Social Science Foundation of Ministry of Education of China (No.
17XJA630002), the Soft Science Research Project in Shaanxi Province
(No. 2017KRM065), and the National Research Project of National Civil
Commission (No. 2017‐GMB‐053).
ORCID
Hongbo Shi http://orcid.org/0000-0003-0899-4022
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How to cite this article: Zhao Y, Feng T, Shi H. External
involvement and green product innovation: The moderating
role of environmental uncertainty. Bus Strat Env. 2018;1–14.
https://doi.org/10.1002/bse.2060
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APPENDIX 1
Measurement items and sources
Customer involvement (adapted from Feng et al., 2010)
CI1: Our key customer often puts forward improving proposes for
green product innovation*
CI2: We often hear key customer's opinions on product prototypes
when developing green products*
CI3: We involve key customer into the green product design and
development stage
CI4: Our key customer has major influence on the design of green
products
CI5: There is a strong consensus in our firm that customer involve-
ment is needed in green product innovation
CI6: We have continuous green product improvement programs
that include our key customer
Supplier involvement (adapted from Feng et al., 2010)
SI1: We involve key supplier into the green product design and
development stage
SI2: Our key supplier has major influence on the design of green
products
SI3: There is a strong consensus in our firm that supplier involve-
ment is needed in green product innovation
SI4: We have continuous green product improvement programs
that include our key supplier
Demand uncertainty (adopted from Chen & Paulraj, 2004)
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DU1: Our master production schedule has a high percentage of var-
iation in demand
DU2: Our customer demand fluctuates drastically from week to
week*
DU3: Our supply requirements vary drastically from week to week
Supply uncertainty (adopted from Chen & Paulraj, 2004)
SU1: The suppliers consistently meet our requirements (Reversed)
SU2: The suppliers produce materials with consistent quality
(Reversed)
Technological uncertainty (adapted from Chen & Paulraj, 2004)
TU1: Our industry is characterized by rapidly changing green
technology
TU2: It will be difficult for us to remain sustainable if we do not
keep up with changes in green technology*
TU3: The rate of process obsolescence is high in our industry
TU4: The green technology changes frequently and sufficiently
Green product innovation (adapted from Chan et al., 2016)
GPI1: Using environmentally friendly material
GPI2: Improving and designing environmentally friendly packaging
for existing and new products
GPI3: Recovery of our end‐of‐life products and recycling
GPI4: Using eco‐labeling
*Items are deleted after reliability or validity analysis.