Demystifying the economic potential of circular supply chain management practices

Abstract

Despite the burgeoning research on Circular Supply Chain Management (CSCM), there is limited insight into the mechanisms through which CSCM practices generate economic benefits. To address this gap, this study draws on an extended resource-based view to propose a model that examines the relationship between CSCM practices and economic performance through environmental information integration capability (EIIC) in Ghana, where economic development and environmental vulnerabilities coexist. We employ a time-lagged survey (two-wave) to gather data from 290 managers of small and medium-sized manufacturing enterprises (SMEs) in Ghana, testing the model using structural equation modelling and necessary condition analysis. Our study finds that CSCM practices are not a sufficient condition for achieving economic performance; however, they are necessary for enhancing economic performance. The findings also highlight that EIIC is both a sufficient and a necessary condition for enhanced economic performance, while fully mediating the relationship between CSCM practices and economic performance. These results provide an enhanced understanding of the link between CSCM practices and economic performance, while emphasising the need for Ghanaian SMEs to practise CSCM and build EIIC to achieve their economic goals. Finally, the study offers actionable recommendations to SMEs on how to effectively leverage CSCM practices and EIIC to achieve economic benefits.

Keywords: Circular supply chain management practices; Economic performance; Environmental information integration capability; Green supply chain integration; Small and medium enterprises.