Environmental Regulations, Financial Incentives, and Sustainable Supply Chain Performance: Evidence from SMEs in Vietnam’s Logistics Sector

Tran Anh Son

doi:10.36690/2674-5208-2026-1-4-14

Authors

Tran Anh Son HUTECH University

DOI:

https://doi.org/10.36690/2674-5208-2026-1-4-14

Keywords:

environmental regulations, financial incentives, supply chain efficiency, green logistics, Small and Medium sized Enterprises (SMEs), Vietnam, sustainable supply chain management

Abstract

This study investigates the influence of environmental regulations and financial incentives on supply chain efficiency and green logistics implementation in small and medium-sized enterprises in Vietnam. Drawing on the Sustainable Supply Chain Management approach, the study proposes a conceptual model to test the relationships between environmental regulations, financial incentives, supply chain efficiency, and green logistics implementation in SMEs. The objective of the study is to examine how environmental regulations and financial incentives affect supply chain efficiency and the implementation of green logistics practices in Vietnamese SMEs, as well as to determine the relative strength of these factors in shaping sustainable supply chain performance. The study collected data from 87 managers and professionals in Vietnam working in logistics and supply chain activities in SMEs. The study applies Partial Least Squares Structural Equation Modeling to evaluate the proposed relationships in the conceptual model. The results show that both environmental regulations and financial incentives have positive effects on supply chain efficiency and green logistics implementation in SMEs. While environmental regulations are more dominant in influencing supply chain discipline, compliance, and efficiency, their effect on green logistics implementation in SMEs is relatively less significant. Conversely, financial incentives are more powerful in influencing supply chain efficiency in SMEs. Financial incentives also have a positive effect on green logistics implementation in SMEs, but only in combination with institutional encouragement and managerial commitment. The findings confirm that regulatory and financial mechanisms are both important drivers of sustainable supply chain development in SMEs; however, their effectiveness differs depending on the specific dimension of performance being assessed. Regulatory pressure strengthens efficiency and compliance, whereas financial support becomes especially important for practical implementation of green logistics measures. Further studies should expand the sample size, compare SMEs across different regions or industries, and explore additional mediating variables such as organizational culture, technological readiness, and leadership commitment in order to better explain green logistics adoption.

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Author Biography

Tran Anh Son, HUTECH University

Faculty of Business Administration, HUTECH University

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