Antecedents of circular manufacturing and its effect on environmental and financial performance: A practice-based view

Citation

Liu Y, Farooque M, Lee C, Gong Y & Zhang A (2023) Antecedents of circular manufacturing and its effect on environmental and financial performance: A practice-based view. International Journal of Production Economics, 260, Art. No.: 108866. https://doi.org/10.1016/j.ijpe.2023.108866

Abstract
Despite the worldwide recognition of the Circular Economy (CE) philosophy, its comprehensive adoption in manufacturing is not well understood in literature and practice. This study theorizes circular manufacturing (CM) by extending the cleaner production concept according to the design thinking of CE. Drawing on the practice-based view, it develops a conceptual model on the antecedents and performance outcomes of CM and the moderating role of Industry 4.0 (I4.0) production technologies on CM-to-environmental and financial performance relationships. The research adopts a mixed-methods approach to examine the hypothesized relationships. Survey data from 255 Chinese manufacturers are analyzed using structural equation modeling and hierarchical regression. Two qualitative case studies verify the survey findings and offer additional insights. The findings suggest that by strengthening a CE culture and integrated management systems, firms can improve CM implementation and consequently environmental and financial performance. However, investing in I4.0 production technologies may not enhance the impact. Our research contributes to the literature by conceptualizing and operationalizing CM as a new construct. It also provides guidelines for implementing CE in manufacturing.

Keywords
Circular economy; Circular manufacturing; Cleaner production; Circular product design; Industry 4.0; Performance

Journal
International Journal of Production Economics: Volume 260