GREEN LOGISTICS PRACTICES, FIRM CHARACTERISTICS AND FIRM PERFORMANCE OF LOGISTICS FIRMS IN KENYA

Abstract

Emissions from the logistics industry are rising at a greater concern than any other industry and the
trend is projected to continue such that by 2030 these levels will be 80% higher than they were in 2007
unless there is a change. Many firms aim at reducing costs and they need to strike a balance between
social, economic, and ecological factors for sustainability. Taking measures concerning ecological
concerns in a socially responsible way is becoming a vital part of the modern organization agenda. The
main aim of this research was to establish the influence of green logistics practices implementation on the
performance of logistics firms operating in Kenya. Explicitly, this study assessed how firm characteristics
influence the connection between green logistics practices and firm performance. The research was
guided by the philosophy of positivism research and it applied the cross-sectional survey research design.
The population of interest consist of 892 logistics firms in Kenya from which a sample of 300 firms was
drawn. Primary data was collected from logistics executives using a structured questionnaire. A response
rate of 71 per cent was achieved. Validity and reliability measurements were done using three frequently
used methods – construct reliability (CR), average variance extracted (AVE), and Cronbach's alpha.
Data were analyzed using covariance-based structural equation modelling (CB-SEM). The study findings
are that, first, there is a significant positive association between the implementation of green logistics
practices and firm performance of logistics firms in Kenya (β=0.63, p<0.001). Second, firm size (β = -
1.264, p < 0.001) and possession of an EMS certification (β = -.638, p = .004) had a significant
negative moderating effect on the connection between green logistics practices and firm performance
while firm ownership status was established to have an insignificant moderating influence on the link (β
= .070, p = .823). This research gave empirical proof that the execution of green logistics practices
results in enhanced firm performance because the firm builds a causally vague and socially complex
resource that is hard to duplicate which is in line with the natural resource-based view. The study
recommends that logistics firms in Kenya should implement environment-friendly practices both within
firms and in the wider supply chain beginning with green packaging, route optimization, fuel efficiency,
carbon emission measurement and reverse logistics. This conclusion is true regardless of the ownership
status of the firm. If the firm is large or possesses an EMS certification then the link between the
execution of green logistics practices and firm performance dampens.
Keywords: green logistics practices; firm size; possession of an EMS certification; firm ownership status;
firm performance.