How Logistics Innovation Capability Affects Supply Chain Risks, SC Mitigation Strategies and Firms’ Performance: A Serial Mediation Framework Based on the Pakistani Courier Industry

Abstract

The purpose of this study is to explore the impact of the logistics innovation capability on the supply chain risks and uncertainties in the Pakistan courier industry. The supply chain risks studied are company-side risks, customer-side risks, information-side risks, and environmentside risks. The main purpose of the paper is to study how logistics capabilities can reduce the supply chain risks and uncertainties of the courier companies to improve the performance of the courier companies of Pakistan. Empirical validity was established by conducting a survey using a close-ended questionnaire. Data was collected from 140 respondents and analyzed using confirmatory factor analysis and structured equation modeling. The results suggested that logistics innovation capability has a significant positive effect on all four categories of SC risks. However, only Information Side Risk has a significant and positive effect on SC Risk Mitigation Strategies, which in turn seem to positively affect firm performance. Logistics Innovation Capability also seems to directly but negatively affect SCM Risk Mitigation Strategies. The findings suggested a serial mediation, where Logistics Innovation Capability increases Information Side Risk, which in turn causes Risk Mitigation Strategies, and through this, positively affects performance. The results show a slight inclination of a few supply chain risk items towards the logistics capability but, some results were not attained as suggested by the previous studies. However, several reasons have been identified regarding this result.

Keywords: Logistics Innovation Capability, Supply Chain Risks, and Uncertainty, Risk Mitigation Strategies, Firm Performance