Impact of Sustainable Supply Chain Practices on Corporate Firm Performance in the Sri Lankan Apparel Sector Engaged in International Business.

Abstract

Sustainable Supply Chain Practices (SSCPs) refer to the integration of environmental, social, and economic sustainability considerations into supply chain activities, including sourcing, production, supplier relationships, and resource use. As Sri Lanka’s apparel industry is closely connected to international markets, sustainability has become strategically important for maintaining competitiveness and meeting international buyer expectations. Recent evidence indicates that sustainable supply chain management can improve firm, operational, economic, environmental, and social performance, although the strength of these relationships varies across contexts (Wang et al., 2023; Jum’a et al., 2024). In the textile and apparel context, environmental risks and green performance have received greater attention than integrated social and economic sustainability (Saeidi et al., 2022). Sri Lankan evidence has also examined supplier sustainability risk management strategies and supply chain performance, but this literature has not jointly tested the environmental, social, and economic dimensions of SSCPs against corporate firm performance in export-oriented apparel companies (Silva et al., 2024). Therefore, this study examines how environmental, social, and economic sustainable supply chain practices influence the performance of export-oriented apparel companies in Sri Lanka. The study adopted a positivist research philosophy and a quantitative research design. It was selected because the study tests deductively derived hypotheses using observable, measurable questionnaire data and statistical analysis, while the quantitative design specifies the systematic procedure used to collect and analyse numerical data (Saunders et al., 2023). Convenience sampling technique was applied and data were collected using a structured questionnaire administered through both online and printed formats. A total of 158 valid responses were obtained from employees, managers, and executives of export-oriented apparel companies in Sri Lanka. Descriptive statistics, reliability and validity tests, Pearson correlation analysis, and multiple regression analysis were conducted using IBM SPSS. The three sustainability dimensions were positively and significantly correlated with firm performance: environmental practices (r = 0.706, p < 0.01), social practices (r = 0.828, p < 0.01), and economic practices (r = 0.848, p < 0.01). Regression analysis showed that economic sustainable practices were the strongest significant predictor of firm performance (β = 0.510, p < 0.001), followed by social sustainable practices (β = 0.289, p = 0.002), while environmental practices were positive but not statistically significant (β = 0.115, p = 0.073). The regression model explained 75.3% of the variance in corporate firm performance (R² = 0.753). The findings highlight the importance of integrating economic and social sustainability into supply chain strategies while continuing to strengthen environmental practices.