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Research Article
Technological advancement and regulatory support are associated with circular economy principles in Chinese small and medium-sized enterprises, while market risk hinders them. Circular economy principles are associated with eco-innovation, and both relate to environmental and economic performance. Customer pressure shows no direct economic impact, but market risk reduces economic performance.
This study examines how circular economy principles and eco-innovation mediate the effects of external factors, customer pressure, market risk, regulatory support, and technological advancement on environmental performance, economic performance, and employee well-being in Chinese small and medium-sized enterprises (SMEs). A quantitative, cross-sectional survey was conducted with 165 Chinese SMEs. The relationships among the constructs were examined using Partial least squares structural equation modeling (PLS-SEM), with each construct assessed through multiple survey items. Regulatory support (β = 0.33) and customer pressure (β = 0.24) were the strongest positive antecedents of circular economy principles, while market risk had a negative effect (β = -0.19). Circular economy principles were strongly associated with eco-innovation (β = 0.52). Eco-innovation was positively associated with employee well-being (β = 0.42), environmental performance (β = 0.38), and economic performance (β = 0.29). Customer pressure and market risk did not significantly affect technological advancement, and their indirect effects on eco-innovation via technological advancement were non-significant. However, circular economy principles mediated the effects of all three external factors on eco-innovation, while technological advancement mediated only the effect of regulatory support. The associations with environmental performance were stronger than those with economic performance. Overall, circular economy principles and eco-innovation help explain how external enablers relate to environmental, economic, and employee well-being outcomes in Chinese SMEs.
Global sustainability issues, such as resource scarcity, waste accumulation, and environmental degradation, have forced companies to reconsider their production and consumption patterns1. Firms have been increasingly interested in enhancing their operations and supply chains to achieve sustainability, and this is where the circular economy (CE), with its focus on redesign, reduce, reuse, and recycle, has gained a lot of attention in the academic and management fields in recent years2. Responding to this, eco-innovation is an emerging part of sustainable business strategy as it stimulates the creation and diffusion of pro....
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The study was carried out in accordance with ethical research practices. Ethical approval was not required since this research did not involve invasive procedures, access to sensitive personal data that would require oversight from a medical or clinical ethics committee, or experimental interventions, and did not involve the collection of biological samples. The research was conducted as an anonymous, voluntary survey of businesspeople (owners, senior managers, and decision-makers) regarding their operational and environmental practices. However, ethical considerations were followed during the research process as outlined below. Informed consent was obtained from all ....
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Descriptive statistics
This section presents the means, standard deviations, skewness, and kurtosis for all constructs in the research model. The mean values ranged from 3.12 (Market Risk) to 3.94 (Regulatory Support), indicating that, on average, respondents perceived moderate to relatively high levels of external pressures, internal practices, and performance outcomes.
| Const....... |
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This study tested the mediating effect of the circular economy principles and eco-innovation in the relationship between external factors (customer pressure, market risk, regulatory support, and technological advancement) and environmental performance, economic performance, and employee well-being in Chinese small and medium-sized enterprises (SMEs). The results of the structural model (Table 6) provide several insights. First, regulatory support was the most important factor, with a β of 0.33, foll.......
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The authors have no conflicts of interest to declare.
| Name | Company | Catalog Number | Comments |
|---|---|---|---|
| Chamber of commerce database | Hunan Provincial Chamber of Commerce (regional, China) | N/A | Commercial business database used for participant recruitment (contact information of SME owners/managers) RRID: N/A |
| Chinese SME classification standard | National Bureau of Statistics of China | SME Standard (2017 revision) | Official classification defining SMEs by industry, employees, and annual revenue (manufacturing: 20-999 employees, RMB 3-400 million; service/logistics: 10-300 employees, RMB 1-100 million) RRID: N/A |
| Harman’s single-factor test (statistical procedure) | N/A (technique implemented in PLS 4.2) | N/A | Post-hoc test for common method bias; complement with full collinearity VIF assessment RRID: N/A |
| Microsoft Excel | Microsoft Corporation | Microsoft 365 (version not specified) | Spreadsheet software for data entry and preliminary cleaning (implied) RRID: SCR_016137 |
| Multi-item scales (Circular Economy Principles) | Adapted from prior literature (not specified) | Items for reduction, reuse, recycling, waste minimisation, resource efficiency | Latent construct measured via multi-item Likert scales; content validity reviewed by academic experts and business professionals RRID: N/A |
| Multi-item scales (Eco-innovation) | Adapted from prior literature | Items for environmentally friendly products, processes, technologies, organisational practices | Measured as adoption or development of green innovations RRID: N/A |
| Multi-item scales (External pressures & enablers) | Adapted from prior literature | Customer pressure, market risk, regulatory support, technological advancement | Measured using adapted items from prior studies on CE and sustainability RRID: N/A |
| Multi-item scales (Sustainability performance) | Adapted from prior literature | Three sub-scales: economic performance, environmental performance, employee wellbeing | Perceived performance outcomes; employee wellbeing captures satisfaction, motivation, morale RRID: N/A |
| Paper-based questionnaire | N/A (printed by research team) | N/A | Physical survey forms distributed during industry networking events; 5-point Likert scale (1=strongly disagree to 5=strongly agree) RRID: N/A |
| PLS 4.2 (SmartPLS) | SmartPLS GmbH | Version 4.2 | Software for Structural Equation Modeling (SEM) with bootstrapping (5,000 resamples) and maximum likelihood estimation RRID: SCR_036419 |
| Translation and pre-testing panel | N/A (human experts) | Two academic experts + two SME-familiar colleagues | Bilingual experts for forward translation and cultural adaptation of questionnaire into Chinese; pre-tested with small group of SME managers RRID: N/A |
| Wenjuanxing (survey platform) | Wenjuanxing (Changsha Ranxing Information Technology Co., Ltd.) | N/A (online platform) | Chinese professional survey platform (equivalent to SurveyMonkey); used for online questionnaire distribution RRID: N/A |