The impacts of sustainable inter-firm collaboration on business performance of shipping companies

• DOI: https://doi.org/10.1108/IJLM-11-2020-0453
• Published date: 07 May 2021
• Date: 07 May 2021
• Pages: 766-789
• Subject Matter: Management science & operations,Logistics
• Author: Thi Minh Trang Tran,Su-Han Woo,Kum Fai Yuen

The impacts of sustainable

inter-firm collaboration on

business performance of

shipping companies

Thi Minh Trang Tran

Department of International Logistics, Chung-Ang University,

Seoul, Republic of Korea and

Faculty of Economics, Vietnam Maritime University,

Haiphong, Vietnam

Su-Han Woo

Department of International Logistics, Chung-Ang University,

Seoul, Republic of Korea, and

Kum Fai Yuen

School of Civil and Environmental Engineering,

Nanyang Technological University, Singapore, Singapore

Abstract

Purpose –To gain competitive advantage, shipping companies need the abilities to manage environmental

requirements, which this study refers to as sustainable shipping capabilities, including internal resources and

external factors such as inter-firm collaboration. However, previous studies mainly focused on the effectiveness

of internal resources, leading decision-makers in shipping companies to undervalue the significance of external

relationships in managing sustainability issues andtheir impact on performance. Therefore, this paper aims to

identify and examine the impacts of sustainable inter-firm collaboration on shipping companies’business

performance (i.e. shippers’loyalty and financial performance).

Design/methodology/approach –A proposed model that explains the relationships between relation

bonding strategies, sustainable inter-firm collaboration and business performance was developed.

Accordingly, a survey questionnaire was constructed and sent to 294 shipping companies in Vietnam.

Structural equation modeling was deployed to examine the validity of the measurement items and investigate

relationships among the latent constructs.

Findings –The findings show that financial bonding strategies have the most significant impact on

sustainable inter-firm collaboration, followed by social bonding strategies and structural bonding strategies.

Furthermore, sustainable inter-firm collaboration has direct and indirect (via perceived shippers’loyalty)

effects on business performance.

Research limitations/implications –Relational bonding strategies provide a unique perspective to

sustainable inter-firm collaboration. This study also contributes to allocate external resources and capabilities

to improve inter-firm collaboration, thereby maximizing financial performance.

Originality/value –This paper contributes to the literature by applying relational bonding strategies that

determine the key factors enabling sustainable inter-firm collaboration.

Keywords Sustainable inter-firm collaboration, Social exchange theory, Relational bonding strategies,

Structural equation modeling, Business performance

Paper type Research paper

IJLM

32,3

766

This paper is part of the first author’s PhD thesis with Chung-Ang University. The authors are grateful

to the editors and the two anonymous reviewers for their valuable feedback and insightful comments.

This research was supported by the 4th Educational Training Program for the Shipping, Port and

Logistics from the Ministry of Oceans and Fisheries of Republic of Korea.

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/0957-4093.htm

Received 27 November 2020

Revised 5 March 2021

Accepted 12 April 2021

The International Journal of

Logistics Management

Vol. 32 No. 3, 2021

pp. 766-789

© Emerald Publishing Limited

0957-4093

DOI 10.1108/IJLM-11-2020-0453

1. Introduction

Shipping companies transport more than 90% of the cargo volume in international trade and

constitute one of the safest and most environmental-friendly industries. However, reducing

emissions from the heavy fuel usage by ships and protecting air and water quality are

considered significant issues affecting the maritime environment. To address these issues,

various protocols and regulations have been widely adopted, such as the International

Maritime Organization (IMO) 2020 Global Sulphur Cap, the London Convention and Protocol

(LC/LP) and the Hong Kong Ship Recycling Convention and Annex VI Prevention of Air

Pollution from Ships of the International Convention for the Prevention of Pollution from

Ships (MARPOL) (Gong et al., 2019). These issues require proactive responses from shipping

companies in their ship acquisition and management and service operations. The abilities to

manage environmental requirements, referred to as sustainable shipping capabilities (SSC),

are crucial for shipping companies to gain market advantage.

SSC refers to the abilities of shipping companies to carry out sustainable activities more

efficiently and effectively than do their rivals (Yuen et al., 2019b). The term “efficient”relates

to productivity –the ability to produce more output with the same amount of resources. By

contrast, the term “effective”denotes efficacy in achieving better business performance

and gaining sustainable competitive advantage. SSC may be strengthened by intra-firm

resources such as sustainable facilities, financial resources, knowledge and organizational

culture as well as by inter-firm resources such as inter-firm collaboration.

In recent years, studies on SSC have explained why and how intra-firm resources and

capabilities are acquired. For instance, to comply with the IMO 2020 Global Sulphur Cap and

other environmental regulations, shipping companies use sustainable physical assets such as

green ships with more efficient engines or scrubbers; these assets also provide cost benefits to

the company (Schinas et al., 2018). Similarly, Busby (2019) pointed out that investment in

financial resources allows shipping companies to enhance the environmental performance of

their vessels and the welfare of seafarers, as well as their image and reputation (Ben-Hador,

2019). Further, Yuen et al. (2019b) found that intangible internal resources such as knowledge

organizational knowledge and culture allow a shipping company to exploit its resources and

communicate (to employees) their commitment to sustainability as part of their vision

and goals.

A few studies have investigated issues related to pursuing sustainability as a motive for

acquiring inter-firm resources, in addition to the motivations and implications with regard to

internal resources and capabilities. For instance, Gunasekaran et al. (2015) emphasized that

developing inter-firm resources can create greater value than the total value obtained from

each partner’s resources. Additionally, inter-firm resources can be viewed as a contractual

governance arrangement in which shipping companies collaborate with their stakeholders to

achieve competitive advantage. In general, inter-firm resource collaboration is mainly

motivated by a commercial approach, with the expectation of strengthening sustainability

through business performance.

Additionally, other researchers examined the implementation of inter-firm resource

collaboration with the aim of improving business performance. Lun et al. (2016) suggested

that building trust and commitment between a shipping company and its core partner can

minimize transaction cost and improve the effectiveness of sustainable shipping

management. Moreover, Lai et al. (2013) pointed out that principles of resources and

capabilities collaboration should be implemented to integrate sustainability with business

activities and to optimize organizational decision-making in shipping companies.

Although previous research studies have mentioned some approaches regarding how to

collaborate on sustainable inter-firm resources, two major gaps were noted. First, many of

these studies are resource-focused. They pointed out various types of resources such as inter-

firm relationship, knowledge exchange, capabilities and effective governance processes

Sustainable

inter-firm

collaboration

767