An Empirical Examination of the Effect of Operational Leannes and Outsourcing on Carbon Efficiency in a Supply

The aim of this paper is to empirically examine the effect of two operational strategies on a company’s direct and supply chain carbon performance. We analyze two complementary strategies—leaning internal processes and outsourcing—that firms may choose to adopt when facing external pressure such as reducing carbon emissions in their supply chains. We focus on the dual effect of these two strategies as a way to attain superior environmental and market performance, namely the idea of carbon efficiency. Based on multi-year carbon inventory data from U.S. manufacturing companies, we found a curvilinear relationship between the level of outsourcing and carbon efficiency. We also found that leanness, as measured by inventory turnovers, significantly enhances both direct and supply chain carbon efficiency.