Reverse logistics in the electronic industry of China: a case study

Purpose The purpose of this paper is to report on research undertaken to investigate whether current reverse logistics theories and models can be totally applied in developing countries like China using the electronic industry as a case study. Design/methodology/approach A case study approach was adopted with information collected from company web sites, direct observation, and in‐depth interviews with four major consumer electronic product manufacturers in China. Findings were analyzed and compared across all the cases studied to determine the common external and internal drivers for reverse logistics implementation as well as the obstacles faced by the whole electronic industry. A comparison with the literature was made to identify the gaps between current theories and models and actual practices in China. Findings The findings suggest that while reverse logistics drivers vary from company to company, barriers to reverse logistics are common and are mainly external. The major difficulty in implementing reverse logistics in the electronic industry of China is the lack of enforceable laws, regulations or directives to motivate manufacturers. Furthermore, economic support and preferential tax policies are absent to help manufacturers offset the high investment costs of reverse logistics. Low public awareness of environmental protection and underdevelopment of recycling technologies are also some of the obstacles to widespread reverse logistics implementation. The findings also reveal the presence of linkages between the various external factors that are not fully explored in current reverse logistics models. Research limitations/implications The study corroborates the application of transaction cost economics and resource‐based view theory to account for the different approaches to reverse logistics adopted by firms in developing countries. It also reveals a need for further research on the linkages between external factors affecting reverse logistics implementation. The four case studies of large corporations are drawn from a Chinese setting in which implementation of reverse logistics is still in an early stage. The complex nature of China's transitional economy and political considerations may influence the perspectives and practices of small manufacturers in the management of environmental issues thus limiting the generalizability of the findings. Practical implications The study reveals the problems encountered in the implementation of reverse logistics in China and proposes measures to expedite the development. Originality/value This paper presents a systematic analysis of the external and the internal factors affecting reverse logistics implementation in developing countries like China. It reveals the need to investigate the linkages between the various external factors that are less explored in current reverse logistic theories and models. The study also identifies the major drivers and obstacles faced by the industry, a clear understanding of which might facilitate the formulation of appropriate nation‐wide reverse logistics policy and strategy through the support of the government and the investment of the manufacturers.