Predicting Circular Economy Practices of SMEs in an Emerging Country: Do Supply Chain Finance and Business Survivability Matter?
28 Nov 2023
09:30 -11:30
Open to: All
Chen-Tsao Lecture Theatre, Cambridge Judge Business School
Trumpington St
Cambridge
CB2 1AG
United Kingdom
Join our Centre for Business Research seminar
Speaker: Dr Luluk Lusiantoro, Universitas Gadjah Mada
About the seminar topic
- Purpose – Limited financial resources is one of key factors hindering SMEs to adopt sustainable practices. Some SMEs struggle to survive and are not bankable, so they need to rely on financial supports from their supply chain (SC) partners. This work aims to understand whether and how SC finance (SCF) and business survivability (SRV) can drive circular economy practices (CEP) amongst SMEs in an emerging economy.
- Design/methodology/approach – We survey 515 SMEs from a diverse range of industries in Indonesia, one of the largest emerging economies in the world, and analyse the data using Partial Least Squares Structural Equation Modelling (PLS-SEM).
- Findings – This research finds that SCF and SRV affect CEP indirectly through SC non-financial support and firm performance. Whilst higher SRV could increase chances to access SCF, non-financial support from SC actors is needed to make the financing effective and to motivate SMEs to adopt CEP. Without SCF, SMEs could adopt CEP when their business performs well. Otherwise, their focus is on surviving their business operations.
- Practical implications – The results could be used to moderately predict cases of CEP in similar settings. External stakeholders should not take CEP for granted and should not only focus on financial incentives to drive CEP.
- Originality/value – Our novel research provides insight on SRV as a critical driving factor of CE adoption amongst SMEs in the developing world. We also contribute by using a predictive modelling to address the phenomenon.
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The seminar can also be watched live online via Zoom.