Understanding Factors of Households’ Circular Economy Adoption to Facilitate Sustainable Development in an Emerging Country

Abstract

A shift from a linear economy to a circular economy can help participants (i.e., enterprises and households) to cut expenses, stabilize supply chains for the long term, and lower manufacturing and operating costs. Although the circular economy can benefit both the economy and the environment, this topic has still been under-studied in developing countries. More specifically, there has been little known about conditions and/or barriers for stakeholders in adopting a circular economy. In this regard, the authors conducted a study among Vietnamese households to improve the understanding of the factors (both drivers and impediments) of a circular economy adoption. Specifically, the authors employed a questionnaire-based survey approach to collect data from 473 households operating in the agricultural sector in the Red River Delta, Vietnam. The PLS-SEM method was performed to unravel the complicated relationship between circular economy adoption, organizational innovation, and income of agricultural households. The results showed that the adoption of circular economy is widely influenced by many factors in Vietnam. For example, technology has a negative impact on the level of circular economy adoption while policy and regulation, management, customer, and society have the opposite effect. Furthermore, organizational innovation played a fully mediating role between circular economy adoption and households’ income. The results of the study offer many policy implications for supporting and increasing the households’ circular economy adoption for further sustainable development in Vietnam and beyond.