Environmental Supply Chain Cooperation and Its Effect on the Circular Economy Practice‐Performance Relationship Among Chinese Manufacturers

Due to resource scarcity and environmental degradation, a new development concept emphasizing environmental concerns, called the circular economy (CE), has been enacted in legislation in China. This environmental management concept can be implemented at three levels, namely, region, industrial zone, and individual enterprise, with the objective of boosting economic development while lessening environmental and resource challenges. Environmental supply chain cooperation (ESCC), an approach that utilizes customer and supplier cooperation in environmental management, has been initiated among Chinese enterprises. Using survey data collected from 396 Chinese manufacturers, we examine the role of ESCC practices in influencing the relationship between implementing CE practices and the achievement of performance outcomes by testing the moderation and mediation effects of ESCC practices on the CE practice‐performance relationship through hierarchical regression analysis. Our data analyses indicate that ESCC practices are useful by moderation and, in some cases, essential by mediation, for Chinese manufacturers seeking to realize the performance targets desired in CE practices. The results highlight the need for Chinese manufacturers to improve supply chain coordination in their implementation of CE. On the policy side, our research findings suggest that ESCC practices are beneficial and, in some cases, necessary for the development of CE in China.