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Understanding the effect of market orientation on circular economy practices: The mediating role of closed‐loop orientation in German SMEs

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  • Corinna Vera Hedwig Schmidt
  • Bastian Kindermann
  • Cassian Felix Behlau
  • Tessa Christina Flatten

Abstract

The implementation of circular economy (CE) practices is considered a key driver towards sustainable development of firms. Earlier studies point to the general strategic approach of market orientation as an antecedent to CE practice implementation. Still, insights are limited as the mechanisms underlying this relationship remain unclear. Based on a sample of 121 German small and medium‐sized enterprises (SME), we empirically examine how the strategic approach of closed‐loop orientation mediates the relationship between market orientation and the implementation of three types of CE practices. Using structural equation modelling, we find that while market orientation is positively related to all three types of CE practices, closed‐loop orientation mediates these relationships for only two. Our study extends CE literature by suggesting that market orientation is translated into closed‐loop orientation to spur CE practice implementation. We also offer a differentiated understanding of CE practice implementation in the context of German SMEs.

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  • Corinna Vera Hedwig Schmidt & Bastian Kindermann & Cassian Felix Behlau & Tessa Christina Flatten, 2021. "Understanding the effect of market orientation on circular economy practices: The mediating role of closed‐loop orientation in German SMEs," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 4171-4187, December.
    • Handle: RePEc:bla:bstrat:v:30:y:2021:i:8:p:4171-4187
    DOI: 10.1002/bse.2863
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    2. McDougall, Natalie & Wagner, Beverly & MacBryde, Jill, 2022. "Competitive benefits & incentivisation at internal, supply chain & societal level circular operations in UK agri-food SMEs," Journal of Business Research, Elsevier, vol. 144(C), pages 1149-1162.
    3. Marco Antonio Paula Pinheiro & Daniel Jugend & Ana Beatriz Lopes de Sousa Jabbour & Charbel Jose Chiappetta Jabbour & Hengky Latan, 2022. "Circular economy‐based new products and company performance: The role of stakeholders and Industry 4.0 technologies," Business Strategy and the Environment, Wiley Blackwell, vol. 31(1), pages 483-499, January.
    4. Raghuveer Negi & Amit Kumar Gupta & Vidhu Gaur, 2023. "Effect of green marketing orientation dimensions on green innovation and organizational performance: A mediation‐moderation analysis," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 5435-5458, December.
    5. Viktor Koval & I Wayan Edi Arsawan & Ni Putu Santi Suryantini & Serhii Kovbasenko & Nadiia Fisunenko & Tetiana Aloshyna, 2022. "Circular Economy and Sustainability-Oriented Innovation: Conceptual Framework and Energy Future Avenue," Energies, MDPI, vol. 16(1), pages 1-19, December.
    6. Patrizia Ghisellini & Ivana Quinto & Renato Passaro & Sergio Ulgiati, 2024. "Exploring environmental and social performances of circular start‐ups: An orientation and certification assessment," Business Strategy and the Environment, Wiley Blackwell, vol. 33(4), pages 3222-3241, May.
    7. Bimpizas-Pinis, Meletios & Calzolari, Tommaso & Genovese, Andrea, 2022. "Exploring the transition towards circular supply chains through the arcs of integration," International Journal of Production Economics, Elsevier, vol. 250(C).
    8. Nathalia Suchek & João J. Ferreira & Paula O. Fernandes, 2022. "A review of entrepreneurship and circular economy research: State of the art and future directions," Business Strategy and the Environment, Wiley Blackwell, vol. 31(5), pages 2256-2283, July.

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