Circular economy practices, antecedents and firm performance in the Chinese manufacturing industry

This thesis aims to investigate the Circular Economy (CE) practices, and their antecedents and the relationship with firm performance in the China’s manufacturing industry through meta-analysis and secondary data analysis methods. This thesis consists of four essays to address the research objectives. Essay 1 develops a conceptual model based on four themes identified through systematic literature review, and illustrates the relationship between them. Moreover, two major challenges, including circular supply chain execution and collaborative relationship building and interaction with circular supply chain execution, in the implementation of circular economy are highlighted to come up with feasible suggestions for managers in the textile and apparel industry. Essay 2 is the first meta-analysis on the relationship between CE practices and firm performance based on 41 papers published between 2005 and 2021 in this field. The findings demonstrate that the environmental practices of CE have a positive effect on firm financial performance. Additionally, nation, firm size, and industry type also pose an impact on the relationship between CE practices and firm performance. Essay 3 provides solid evidence on the relationship between firm-level digital transformation (DT) and CE performance by using fixed effects model with a panel dataset containing 238 Chinese listed high-tech manufacturing companies from 2006–2019. The regression results indicate that DT positively affects CE performance at the firm level. Moreover, based on institutional theory, Essay 3 further identifies that this relationship will be strengthened when the level of regional institutional development and industry competition is higher. However, the firm’s political connection does not affect the DT - CE performance relationship. Essay 4 is the first essay that provides empirical evidence for the relationship between firm-level green innovation (GI) and circular supply chain management (CSCM) adoption by using panel data regression analysis on the secondary data of 284 Chinese manufacturing companies from 2008 to 2020. The regression results indicate that GI has a positive impact on CSCM adoption at the firm level. This essay also finds that R&D level measured by the proportion of R&D personnel (RDPR) positively moderates this key connection, while financial performance measured by return on equity (ROE) does not. Overall, the thesis makes a significant contribution to CE literature through a comprehensive literature review, identifying two antecedents (Digital transformation and Green innovation) and the relationship between CE practice and sustainability performance of a firm.