When Do Environmental Initiatives Pay Off? The Role of Long‐Term Orientation in Supply Chain Efficiency

ABSTRACT This study examines how environmental initiatives undertaken by supply chain partners influence multidimensional efficiency and whether national long‐term orientation moderates these relationships. Using panel data from 30 counterparts of Merck & Co. Inc. (180 firm–year observations, 2018–2023), innovation efficiency, eco‐efficiency, and market efficiency are estimated using a three‐stage range directional measure network data envelopment analysis model. Firm and year fixed‐effects regressions with Driscoll–Kraay standard errors are employed to evaluate the effects of resource use, emissions reduction, and environmental innovation initiatives. Results reveal distinct nonlinear relationships across environmental dimensions. Resource use initiatives exhibit diminishing returns, whereas emissions reduction and environmental innovation involve initial efficiency losses before generating positive outcomes at higher implementation levels. Long‐term orientation strengthens these later‐stage benefits, indicating that the institutional context shapes the timing and magnitude of environmental investment returns. Findings demonstrate that environmental initiatives should be evaluated according to their specific dimensions and implementation horizons rather than as uniformly efficiency‐enhancing strategies.