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

Abstract

PurposeThe 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/approachA cross-sectional study of 594 assistant managers and SME managers was used while data were analyzed through Smart PLS.FindingsThe 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 implicationsThe 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/valueThis study enhanced the natural resource-based view (NRBV), describing the mechanisms that view GEIs and EC as pollution prevention in CE practice.