The role of customer integration in extended producer responsibility: A study of Chinese export manufacturers

- The link between extended producer responsibility (EPR) practices and performance is examined.
- The role of customer integration on the EPR practices-performance link is discussed.
- EPR practices bring performance benefits.
- Customer integration moderates the EPR practices-performance link.

Extended producer responsibility (EPR) is increasingly emphasized by manufacturing enterprises to improve eco-efficiency and to satisfy the growing environmental requirements expected in the market. This trend is salient for export-oriented manufacturers mandated to comply with environmental regulatory requirements before entry is granted for their products in the requisite overseas countries. Drawing on the contingency theory, we examine the EPR practices undertaken by export-oriented manufacturers and the market and financial performance outcomes when such practices are characterized with low and high levels of customer integration in their implementation. Survey data collected from 134 manufacturing exporters in China show positive association of EPR practices with the performance outcomes. Using split group analysis, we found performance differences between the high and low manufacturer groups in customer integration for their EPR practices implementation. Particularly, the high customer integration group achieves better market performance whereas the low group weak in customer integration reap greater financial benefits. Managers need to understand the role of customer integration and the financial and market performance implications of implementing EPR practices to align with their performance goals and to build their supply chain system capabilities in the age of global complexity.