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Stakeholder Pressure, Circular Economy Practices, and Sustainability Performance: The Moderating Effect of Ecological Innovation Capabilities

Author

Listed:
  • Vivian Osei

    (University of Electronic Science and Technology of China
    GIMPA Business School
    University of Electronic Science and Technology of China)

  • Disraeli Asante-Darko

    (GIMPA Business School
    Ashesi University)

  • Matthew Quayson

    (Ho Technical University)

Abstract

The literature linking circular economy (CE) and the triple bottom line (TBL) approach to sustainable development presents contradictory findings and lacks empirical support, other than implicit claims alluded to in current anecdotes, unsubstantiated with adequate scientific theories. Besides, whether adopting CE practices at the micro-level can support corporate sustainability remains unclear, owing to limitations in ecological innovation capabilities to support CE. Drawing on stakeholder theory and ecological modernization theory (EMT), we construct a theoretical framework that investigates whether stakeholder pressures for implementing CE practices can augment the TBL values of sustainability performance, moderated by firms’ ecological innovation capabilities for the CE paradigm. Using data from firms operating in Ghana’s mining industry, the conceptual model was evaluated using partial least square structural equation modeling. The results confirm the relevance of the pressures originating from organizational, market, and regulatory stakeholders to implement CE practices as a strong sustainability paradigm for enhancing the TBL dimensions. Also, companies that yield to stakeholder pressures to build innovative capabilities can effectively implement CE practices and improve their sustainability performance. Notably, high levels of ecological innovation capabilities complement CE practices to strengthen economic, social, and environmental sustainability. Subsequently, we supplement the growing theoretical discourse on CE’s contribution to sustainability with empirical information from the mining industry within an emerging country via the EMT and stakeholder theory to support CE advancement within firms’ operations and the broader sustainable development framework. Also, the critical implications for practice and policy are suggested.

Suggested Citation

  • Vivian Osei & Disraeli Asante-Darko & Matthew Quayson, 2024. "Stakeholder Pressure, Circular Economy Practices, and Sustainability Performance: The Moderating Effect of Ecological Innovation Capabilities," Circular Economy and Sustainability, Springer, vol. 4(4), pages 3139-3170, December.
    • Handle: RePEc:spr:circec:v:4:y:2024:i:4:d:10.1007_s43615-024-00373-7
    DOI: 10.1007/s43615-024-00373-7
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