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Circular economy practices in SMEs: aligning model of green economic incentives and environmental commitment

I. Wayan Edi Arsawan (Department of Business Administration, Politeknik Negeri Bali, Tuban, Indonesia)
Viktor Koval (Izmail State University of Humanities, Odessa, Ukraine)
Dwi Suhartanto (Department of Business Administration, Politeknik Negeri Bandung, Bandung, Indonesia)
Ni Kadek Dessy Hariyanti (Department of Business Administration, Politeknik Negeri Bali, Tuban, Indonesia)
Natalіia Polishchuk (Vocational Education, Labor Training and Technology, Rivne State University for Humanities, Rivne, Ukraine)
Viktoriia Bondar (Odesa National University of Technology, Odessa, Ukraine)

International Journal of Productivity and Performance Management

ISSN: 1741-0401

Article publication date: 13 April 2023

Issue publication date: 6 March 2024

503

Abstract

Purpose

The present study aims to examine the relationship between green economic incentives (GEIs) and environmental commitment (EC) as drivers of the circular economy (CE) practices in small and medium enterprises (SMEs).

Design/methodology/approach

A cross-sectional study of 594 assistant managers and SME managers was used while data were analyzed through Smart PLS.

Findings

The results showed that GEIs positively affect the SMEs' EC and the CE practice model. Furthermore, EC is the mediator between GEIs and the three CE practices: internal environmental management, eco-design and corporate asset management and recovery (CAM&R).

Practical implications

The present study provided a basis for understanding the relevance of SMEs' CE practices and designing a strategic plan for its implementation. Also, it provides insight into that collaboration between triple helix (the government, SMEs and the community) is needed in increasing environmental awareness toward sustainability.

Originality/value

This study enhanced the natural resource-based view (NRBV), describing the mechanisms that view GEIs and EC as pollution prevention in CE practice.

Keywords

Acknowledgements

The authors expand their gratitude to the reviewers for their valuable and insightful comments, feedback, and recommendations for the paper improvements.

Funding: Thank you to the Ministry of Education and Cultural, Research Technology and Higher Education of the Republic of Indonesia, Directorate of Research, Technology and Community Service (DRTPM) for the research grant no. 085/SPK/D4/PPK.01.APTV/VII/2022 and 3163/PL8/PG/2022.

Citation

Arsawan, I.W.E., Koval, V., Suhartanto, D., Hariyanti, N.K.D., Polishchuk, N. and Bondar, V. (2024), "Circular economy practices in SMEs: aligning model of green economic incentives and environmental commitment", International Journal of Productivity and Performance Management, Vol. 73 No. 3, pp. 775-793. https://doi.org/10.1108/IJPPM-03-2022-0144

Publisher

:

Emerald Publishing Limited

Copyright © 2023, Emerald Publishing Limited

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