Effects of Supply Chain Integration and Market Orientation on Firm Performance : Evidence from China

Purpose: The present paper aims to investigate the impact of two different dimensions of supply chain integration on two aspects of firm performance in the emerging economy of China. In addition, the moderating effects of market orientation on the relationship between supply chain integration and firm performance are explored.Design/methodology/approach: Data were obtained from a survey administered to 246 firms in the manufacturing and services industry in China. Hierarchical regression analysis was used to test the hypotheses.Findings: Operational coordination is positively associated with operational performance and business performance. Information sharing affects only operational performance; it has no impact on business performance. Furthermore, the results provide empirical support for the moderating effects of market orientation on the association of supply chain integration and firm performance.Research limitations/implications: The present study uses the focal firm as the unit of analysis. Future studies should examine the research issue at the level of the supply chain. Second, the generalizability of the current findings may be limited because this present study was conducted only in China. Future studies should collect data from firms in different political and cultural environments. Third, the current research used a cross-sectional research design. Future research should consider applying multiple sources of data and conducting a longitudinal study. Finally, the present study measured firm performance using the subjective perceptions of the key respondents. Future research should include objective measures of firm performance.Practical implications: Managers are provided with an in-depth understanding of how the different dimensions of supply chain integration affect the different aspects of firm performance and how the types of market orientation in emerging economies, in general, and in China, in particular, moderate these effects.Originality/value: The current paper contributes knowledge on the value-realizing mechanism of supply chain integration from a resource-based view. It presents a multidimensional explanation of the relationship among supply chain integration, market orientation, and firm performance in the context of China