An Extended Institutional Theory Perspective on the Implementation of the Circular Economy: Empirical Insights From New Zealand Food Manufacturing Firms

In a linear economic model, unsustainable production and consumption patterns are linked to negative environmental impacts. However, there is little empirical research on the performance of manufacturing firms in developing the circular economy (CE) in New Zealand. Accordingly, this study explores how the CE has been implemented in New Zealand's food manufacturing firms and the key factors that drive and prevent their CE practices. Our study used a multiple‐case study of six large food manufacturing firms that engage in CE practices in New Zealand. We found that, although these firms focused on CE principles of reducing, reusing and recycling, the recovering principle is missing. Additionally, they face multiple barriers from the three most salient institutional pillars: regulatory, socio‐cognitive and economic/supply chain. The study contributes to extended institutional theory in the CE literature by establishing an integrated framework. Our practical contribution to the practitioners is to operate the four CE concepts simultaneously by promoting the identified institutional drivers.