Do circular economy practices accelerate CSR participation of SMEs in a stakeholder-pressured era? A network theory perspective

The relevance of the circular economy in mitigating resource scarcity concerns associated with the linear economy cannot be overemphasized. While circular approaches, as reported by the literature, have focused primarily on the economic and environmental dimensions, there is a paucity of literature concerning the social impacts of the circular economy. Responding to calls to examine the mechanisms through which circular economy practices tackle the social concerns of society, this paper draws on the network theory to investigate how circular economy practices, induced by stakeholder pressures, directly and via the mediating mechanisms of innovation and collaboration capabilities impact the CSR participation of SMEs. Using 133 survey responses, the findings reveal that circular economy practices significantly promote higher CSR participation only through the indirect effects of innovation and collaboration capabilities. The contribution of this study lies in providing insight concerning how SMEs can rely on stakeholder networks to access external resources and compensate for resource scarcity while adopting circular economy practices and achieving greater CSR participation through innovation and collaboration.