IDEAS home Printed from https://ideas.repec.org/a/spr/ijogbc/v18y2023i2d10.1007_s42943-023-00074-2.html
   My bibliography  Save this article

Achieving Sustainability of SMEs Through Industry 4.0-Based Circular Economy

Author

Listed:
  • Manish Mohan Baral

    (GITAM School of Business, GITAM (Deemed to Be University))

  • U. V. Adinarayana Rao

    (GITAM School of Business, GITAM (Deemed to Be University))

  • K. Srinivasa Rao

    (GITAM School of Business, GITAM (Deemed to Be University))

  • Girish Chandra Dey

    (GITAM School of Business, GITAM (Deemed to Be University))

  • Subhodeep Mukherjee

    (GITAM School of Business, GITAM (Deemed to Be University))

  • M. Arun Kumar

    (GITAM School of Business, GITAM (Deemed to Be University))

Abstract

Industry 4.0 and circular economy are two energetic aspects of operations management and production economics. The current study extracts the factors for adopting an industry 4.0-based circular economy to measure sustainability in SMEs. Eight hypotheses are proposed by identifying one independent variable, four mediating variables and one dependent variable. Survey-based research is carried out, and the sample size for the current study is 296 from different SMEs. The structural equation modeling approach is utilized for testing the hypotheses. The construct identified is industry 4.0-based circular economy; the four mediating variables are: economic performance, environmental performance, social performance, and operational performance, and the dependent variable is sustainability. The mediating variables have a positive impact on the dependent variable. The study is unique as the joint adoption of industry 4.0 and circular economy is tested, and also it reveals the importance of sustainability achievement in the operating firms. The prior studies have not considered the joint adoption of industry 4.0 and circular economy.

Suggested Citation

  • Manish Mohan Baral & U. V. Adinarayana Rao & K. Srinivasa Rao & Girish Chandra Dey & Subhodeep Mukherjee & M. Arun Kumar, 2023. "Achieving Sustainability of SMEs Through Industry 4.0-Based Circular Economy," International Journal of Global Business and Competitiveness, Springer, vol. 18(2), pages 128-144, December.
    • Handle: RePEc:spr:ijogbc:v:18:y:2023:i:2:d:10.1007_s42943-023-00074-2
    DOI: 10.1007/s42943-023-00074-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s42943-023-00074-2
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s42943-023-00074-2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ana Beatriz Lopes de Sousa Jabbour & C.J. Chiappetta Jabbour & T.-M. Choi & H. Latan, 2022. "`Better Together': Evidence on the Joint Adoption of Circular Economy and Industry 4.0 Technologies," Post-Print hal-04276062, HAL.
    2. Raj, Alok & Dwivedi, Gourav & Sharma, Ankit & Lopes de Sousa Jabbour, Ana Beatriz & Rajak, Sonu, 2020. "Barriers to the adoption of industry 4.0 technologies in the manufacturing sector: An inter-country comparative perspective," International Journal of Production Economics, Elsevier, vol. 224(C).
    3. Qalati, Sikander Ali & Yuan, Li Wen & Khan, Muhammad Aamir Shafique & Anwar, Farooq, 2021. "A mediated model on the adoption of social media and SMEs’ performance in developing countries," Technology in Society, Elsevier, vol. 64(C).
    4. Millar, Neal & McLaughlin, Eoin & Börger, Tobias, 2019. "The Circular Economy: Swings and Roundabouts?," Ecological Economics, Elsevier, vol. 158(C), pages 11-19.
    5. Rajput, Shubhangini & Singh, Surya Prakash, 2019. "Connecting circular economy and industry 4.0," International Journal of Information Management, Elsevier, vol. 49(C), pages 98-113.
    6. Julian Marius Müller & Daniel Kiel & Kai-Ingo Voigt, 2018. "What Drives the Implementation of Industry 4.0? The Role of Opportunities and Challenges in the Context of Sustainability," Sustainability, MDPI, vol. 10(1), pages 1-24, January.
    7. Jessica Rossi & Augusto Bianchini & Patricia Guarnieri, 2020. "Circular Economy Model Enhanced by Intelligent Assets from Industry 4.0: The Proposition of an Innovative Tool to Analyze Case Studies," Sustainability, MDPI, vol. 12(17), pages 1-22, September.
    8. Tiago Hennemann Hilario da Silva & Simone Sehnem, 2022. "The circular economy and Industry 4.0: synergies and challenges," Revista de Gestão, Emerald Group Publishing Limited, vol. 29(3), pages 300-313, May.
    9. Dai, Jing & Cantor, David E. & Montabon, Frank L., 2017. "Examining corporate environmental proactivity and operational performance: A strategy-structure-capabilities-performance perspective within a green context," International Journal of Production Economics, Elsevier, vol. 193(C), pages 272-280.
    10. Paolo Rosa & Claudio Sassanelli & Andrea Urbinati & Davide Chiaroni & Sergio Terzi, 2020. "Assessing relations between Circular Economy and Industry 4.0: a systematic literature review," International Journal of Production Research, Taylor & Francis Journals, vol. 58(6), pages 1662-1687, March.
    11. 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.
    12. Charbel Jose Chiappetta Jabbour & Stefan Seuring & Ana Beatriz Lopes De Sousa Jabbour & Daniel Jugend & Paula de Camargo Fiorini & Hengky Latan & Wagner Colucci Izeppi, 2020. "Stakeholders, innovative business models for the circular economy and sustainable performance of firms in an emerging economy facing institutional voids," Post-Print hal-04275092, HAL.
    13. Kirchherr, Julian & Reike, Denise & Hekkert, Marko, 2017. "Conceptualizing the circular economy: An analysis of 114 definitions," Resources, Conservation & Recycling, Elsevier, vol. 127(C), pages 221-232.
    14. Dubey, Rameshwar & Gunasekaran, Angappa & Childe, Stephen J. & Bryde, David J. & Giannakis, Mihalis & Foropon, Cyril & Roubaud, David & Hazen, Benjamin T., 2020. "Big data analytics and artificial intelligence pathway to operational performance under the effects of entrepreneurial orientation and environmental dynamism: A study of manufacturing organisations," International Journal of Production Economics, Elsevier, vol. 226(C).
    15. Dalenogare, Lucas Santos & Benitez, Guilherme Brittes & Ayala, Néstor Fabián & Frank, Alejandro Germán, 2018. "The expected contribution of Industry 4.0 technologies for industrial performance," International Journal of Production Economics, Elsevier, vol. 204(C), pages 383-394.
    16. Subhodeep Mukherjee & Manish Mohan Baral & Chittipaka Venkataiah & Surya Kant Pal & Ramji Nagariya, 2021. "Service robots are an option for contactless services due to the COVID-19 pandemic in the hotels," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 48(4), pages 445-460, December.
    17. Sayantan Khanra & Puneet Kaur & Rojers P Joseph & Ashish Malik & Amandeep Dhir, 2022. "A resource‐based view of green innovation as a strategic firm resource: Present status and future directions," Business Strategy and the Environment, Wiley Blackwell, vol. 31(4), pages 1395-1413, May.
    18. Kawai, Norifumi & Strange, Roger & Zucchella, Antonella, 2018. "Stakeholder pressures, EMS implementation, and green innovation in MNC overseas subsidiaries," International Business Review, Elsevier, vol. 27(5), pages 933-946.
    19. Goel, Rajeev K. & Saunoris, James W. & Goel, Srishti S., 2021. "Supply chain performance and economic growth: The impact of COVID-19 disruptions," Journal of Policy Modeling, Elsevier, vol. 43(2), pages 298-316.
    20. Rodríguez-Espíndola, Oscar & Cuevas-Romo, Ana & Chowdhury, Soumyadeb & Díaz-Acevedo, Natalie & Albores, Pavel & Despoudi, Stella & Malesios, Chrisovalantis & Dey, Prasanta, 2022. "The role of circular economy principles and sustainable-oriented innovation to enhance social, economic and environmental performance: Evidence from Mexican SMEs," International Journal of Production Economics, Elsevier, vol. 248(C).
    21. Tsan-Ming Choi & Alexandre Dolgui & Dmitry Ivanov & Erwin Pesch, 2022. "OR and analytics for digital, resilient, and sustainable manufacturing 4.0," Annals of Operations Research, Springer, vol. 310(1), pages 1-6, March.
    22. Anita Liu & Richard Fellows & Martin Tuuli, 2011. "The role of corporate citizenship values in promoting corporate social performance: towards a conceptual model and a research agenda," Construction Management and Economics, Taylor & Francis Journals, vol. 29(2), pages 173-183.
    23. Tortorella, Guilherme Luz & Cawley Vergara, Alejandro Mac & Garza-Reyes, Jose Arturo & Sawhney, Rapinder, 2020. "Organizational learning paths based upon industry 4.0 adoption: An empirical study with Brazilian manufacturers," International Journal of Production Economics, Elsevier, vol. 219(C), pages 284-294.
    24. Lopes de Sousa Jabbour, Ana Beatriz & Chiappetta Jabbour, Charbel Jose & Choi, Tsan-Ming & Latan, Hengky, 2022. "‘Better together’: Evidence on the joint adoption of circular economy and industry 4.0 technologies," International Journal of Production Economics, Elsevier, vol. 252(C).
    25. Genovese, Andrea & Acquaye, Adolf A. & Figueroa, Alejandro & Koh, S.C. Lenny, 2017. "Sustainable supply chain management and the transition towards a circular economy: Evidence and some applications," Omega, Elsevier, vol. 66(PB), pages 344-357.
    26. M.A.P. Pinheiro & D. Jugend & Ana Beatriz Lopes de Sousa Jabbour & C.J. Chiappetta Jabbour & H. Latan, 2022. "Circular Economy-Based New Products and Company Performance: The Role of Stakeholders and Industry 4.0 Technologies," Post-Print hal-04276066, HAL.
    27. Chauhan, Chetna & Parida, Vinit & Dhir, Amandeep, 2022. "Linking circular economy and digitalisation technologies: A systematic literature review of past achievements and future promises," Technological Forecasting and Social Change, Elsevier, vol. 177(C).
    28. Chiappetta Jabbour, Charbel Jose & De Camargo Fiorini, Paula & Wong, Christina W.Y. & Jugend, Daniel & Lopes De Sousa Jabbour, Ana Beatriz & Roman Pais Seles, Bruno Michel & Paula Pinheiro, Marco Anto, 2020. "First-mover firms in the transition towards the sharing economy in metallic natural resource-intensive industries: Implications for the circular economy and emerging industry 4.0 technologies," Resources Policy, Elsevier, vol. 66(C).
    29. Trevor Zink & Roland Geyer, 2017. "Circular Economy Rebound," Journal of Industrial Ecology, Yale University, vol. 21(3), pages 593-602, June.
    30. Rohit Agrawal & Vishal Ashok Wankhede & Anil Kumar & Arvind Upadhyay & Jose Arturo Garza-Reyes, 2021. "Nexus of circular economy and sustainable business performance in the era of digitalization," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 71(3), pages 748-774, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nidhi Karwasra & Vani Aggarwal, 2024. "Impact of Digital Competitiveness on Sustainable Development: A Systematic Literature Review," International Journal of Global Business and Competitiveness, Springer, vol. 19(1), pages 51-63, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lopes de Sousa Jabbour, Ana Beatriz & Chiappetta Jabbour, Charbel Jose & Choi, Tsan-Ming & Latan, Hengky, 2022. "‘Better together’: Evidence on the joint adoption of circular economy and industry 4.0 technologies," International Journal of Production Economics, Elsevier, vol. 252(C).
    2. Andrew Wear, 2023. "Emergent concepts in local economic development," Local Economy, London South Bank University, vol. 38(8), pages 804-826, December.
    3. Alessandra Neri & Marta Negri & Enrico Cagno & Simone Franzò & Vikas Kumar & Tommaso Lampertico & Carlo Andrea Bassani, 2023. "The role of digital technologies in supporting the implementation of circular economy practices by industrial small and medium enterprises," Business Strategy and the Environment, Wiley Blackwell, vol. 32(7), pages 4693-4718, November.
    4. Dwivedi, Ashish & Moktadir, Md. Abdul & Chiappetta Jabbour, Charbel José & de Carvalho, Daniel Estima, 2022. "Integrating the circular economy and industry 4.0 for sustainable development: Implications for responsible footwear production in a big data-driven world," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    5. Felix Carl Schultz & Vladislav Valentinov & Julian Kirchherr & Robert Jaroslav Reinhardt & Ingo Pies, 2024. "Stakeholder governance to facilitate collaboration for a systemic circular economy transition: A qualitative study in the European chemicals and plastics industry," Business Strategy and the Environment, Wiley Blackwell, vol. 33(3), pages 2173-2192, March.
    6. Yang Lu, 2025. "The Current Status and Developing Trends of Industry 4.0: a Review," Information Systems Frontiers, Springer, vol. 27(1), pages 215-234, February.
    7. Belhadi, Amine & Kamble, Sachin S. & Chiappetta Jabbour, Charbel Jose & Mani, Venkatesh & Khan, Syed Abdul Rehman & Touriki, Fatima Ezahra, 2022. "A self-assessment tool for evaluating the integration of circular economy and industry 4.0 principles in closed-loop supply chains," International Journal of Production Economics, Elsevier, vol. 245(C).
    8. Ahmad, Farhan & Bask, Anu & Laari, Sini & Robinson, Craig V., 2023. "Business management perspectives on the circular economy: Present state and future directions," Technological Forecasting and Social Change, Elsevier, vol. 187(C).
    9. Chembessi Chedrak & Gohoungodji Paulin & Juste Rajaonson, 2023. "“A fine wine, better with age”: Circular economy historical roots and influential publications: A bibliometric analysis using Reference Publication Year Spectroscopy (RPYS)," Journal of Industrial Ecology, Yale University, vol. 27(6), pages 1593-1612, December.
    10. Culot, Giovanna & Orzes, Guido & Sartor, Marco & Nassimbeni, Guido, 2020. "The future of manufacturing: A Delphi-based scenario analysis on Industry 4.0," Technological Forecasting and Social Change, Elsevier, vol. 157(C).
    11. Maryam Hina & Chetna Chauhan & Rajat Sharma & Amandeep Dhir, 2023. "Circular economy business models as pillars of sustainability: Where are we now, and where are we heading?," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 6182-6209, December.
    12. Saumyaranjan Sahoo & Suresh Kumar Jakhar, 2024. "Industry 4.0 deployment for circular economy performance—Understanding the role of green procurement and remanufacturing activities," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 1144-1160, February.
    13. Liu, Yanping & Farooque, Muhammad & Lee, Chang-Hun & Gong, Yu & Zhang, Abraham, 2023. "Antecedents of circular manufacturing and its effect on environmental and financial performance: A practice-based view," International Journal of Production Economics, Elsevier, vol. 260(C).
    14. Harshad Sonar & Nikhil Ghag & Yashomandira Kharde & Shriya Ghosh, 2023. "Analysis of barriers affecting circular economy adoption in food supply chain: A strategic perspective," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 5273-5288, December.
    15. Naveen Virmani & Prateek Saxena & Rakesh D. Raut, 2022. "Examining the roadblocks of circular economy adoption in micro, small, and medium enterprises (MSME) through sustainable development goals," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 2908-2930, November.
    16. Ren, Yu & Wu, Kuo-Jui & Lim, Ming K. & Tseng, Ming-Lang, 2023. "Technology transfer adoption to achieve a circular economy model under resource-based view: A high-tech firm," International Journal of Production Economics, Elsevier, vol. 264(C).
    17. Mariana Oliveira & Mécia Miguel & Sven Kevin Langen & Amos Ncube & Amalia Zucaro & Gabriella Fiorentino & Renato Passaro & Remo Santagata & Nick Coleman & Benjamin H. Lowe & Sergio Ulgiati & Andrea Ge, 2021. "Circular Economy and the Transition to a Sustainable Society: Integrated Assessment Methods for a New Paradigm," Circular Economy and Sustainability, Springer, vol. 1(1), pages 99-113, June.
    18. Yasanur Kayikci & Yigit Kazancoglu & Nazlican Gozacan‐Chase & Cisem Lafci, 2022. "Analyzing the drivers of smart sustainable circular supply chain for sustainable development goals through stakeholder theory," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3335-3353, November.
    19. Ankur Tayal & Saurabh Agrawal & Rajan Yadav, 2024. "Implementation of industry 4.0 in construction industry: a review," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 15(9), pages 4163-4182, September.
    20. Qinglan Liu & Adriana Hofmann Trevisan & Miying Yang & Janaina Mascarenhas, 2022. "A framework of digital technologies for the circular economy: Digital functions and mechanisms," Business Strategy and the Environment, Wiley Blackwell, vol. 31(5), pages 2171-2192, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:ijogbc:v:18:y:2023:i:2:d:10.1007_s42943-023-00074-2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.