Fostering closed-loop supply chain orientation by leveraging strategic green capabilities for circular economy performance: empirical evidence from Malaysian electrical and electronics manufacturing firms

Abstract

In recent years, the concept of a circular economy (CE) has gained importance and attracted significant attention among scholars and practitioners. Research that examines the firm’s supply chain capabilities and orientation for performance is well established nonetheless still lacking in supporting the transition from a linear economy to a circular economy. The firms can foster a closed-loop supply chain orientation (CLSCO) through strategic green capabilities as an alternative obtainable to SC firms to achieve CE performance. Thus, this study is interested to examine the antecedents and outcomes of CLSCO by applying the Resource-Based View and Natural Resource-Based View theories. In total, 150 Malaysian manufacturers responded to the survey and were analysed using the SEM Lisrel method. Among the hypotheses tested, only one had no direct effect on CLSCO, and that was the recovery capacities. The remaining hypothesis indicates that CLSCO is positively affected by integration and production capabilities. In contrast, the results of CLSCO indicate that the extent of a company's CLSCO does affect its success in the circular economy. The study concludes, based on the RBV and NRBV principles, that the success of firms in optimising their resources would enable them to use the CLSCO and attain CE performance. Thus, there are numerous ways in which this study can provide practitioners with valuable research insights.