Industry 4.0 and global value chains: what implications for circular economy in SME?

Abstract

PurposeDrawing on the resource-based view (RBV), this paper aims to analyse the relevance of Industry 4.0 (I4.0) technologies and participation in global value chains (GVC) and the effects of the complementarity between both in the adoption of circular economy (CE) actions by small and medium-sized enterprises (SME).Design/methodology/approachThis paper analysed a large-scale international sample by employing logistic and linear regression models to test the research hypotheses on the effects of I4.0 technologies, GVC participation, and the interaction on CE actions (recycling or reusing materials, reducing the consumption and impact of natural resources, saving energy and/or switching to sustainable energy sources, developing sustainable products or services).FindingsThe evidence suggests that I4.0 technologies already represent important resources for CE adoption and SME participating in GVC display a greater likelihood of adopting CE actions. From the perspective of resource complementarity, by interacting the two factors viewed as resources in this article, results may report that adopting I4.0 technologies and simultaneously participating in GVC may turn out detrimental to SME undertaking CE actions, specifically as regards recycling and reusing materials, saving energy or switching to sustainable energy sources and in cases of widely adopting CE practices.Originality/valueThe paper returns novel insights into the adoption of CE practices by presenting evidence that I4.0 technologies and participation in GVC may be successful means for SME seeking to implement CE actions but must be combined carefully. This paper also provides theoretical and practical implications for SME managers, firms participating in GVCs and policy makers, and shedding light on new research avenues.