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Volume 10 Issue 1 2024

Measuring Third-Party Logistics Service Providers’ Innovation Capabilities, Logistics Service Quality, and Sustainable Business Performance: A Confirmatory Factor Analysis Approach
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Siti Nur ‘Atikah Zulkiffli , Maisarah Sebadak, Nur Farah Zafira Zaidi

Most businesses rely on third-party logistics service providers (3PLs) to manage the logistics of delivering products to clients and maintaining the supply chain. Further investigation is required to ascertain the impact of innovation capability and logistics service quality on business performance. The relationship between the capabilities of 3PL service providers and business performance has yet to be adequately studied, both in Malaysia and internationally. In this study, the link between the sustainable business performance of Malaysian providers of 3PL services and the innovation capabilities and logistics service quality are investigated by conducting a literature review and developing a questionnaire to solicit the opinions of industry experts. The above capabilities comprise marketing, technology, management, process, and service innovation. The psychometric qualities of questionnaire items assessing the quality of logistical service, innovation capabilities, and sustainable business performance are evaluated to accomplish this task. A total of 500 questionnaires were distributed to selected Malaysian 3PL service providers. IBM SPSS AMOS 26 was used to analyse the data obtained from 152 usable questionnaires. A hypothesised model of the relationship between innovation capabilities, logistics service capabilities, and sustainable business performance was revised using the first-order CFA method. It was found that the CFA measurement model that had been revised was well-fitting to the results based on the goodness-of-fit indicator. The results of this study show how innovation capabilities and logistics service quality play a significant role in enhancing Malaysian 3PL service providers to sustain their business performance. Focus on this study is needed to ensure that the Malaysian government, firms, and 3PL service providers are prepared to formulate the direction of the logistics industry to meet the needs of society and the economy through innovation.

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