Exploring the Relationship Between Circular Economy Practices and Growth in Manufacturing SMEs

Abstract

The circular economy has been acknowledged as key for manufacturing firms, wishing overcome challenges, particularly relates it to business growth. However, the transition to linear economy at circular economy has been slow in literature, particularly there are relatively few studies that have focused on the relationship of circular economy practices and growth of small and medium-sized manufacturing companies, for this reason this study's main objective is to fill this existing gap in the literature. In addition, a self-administered questionnaire was distributed to a sample of 400 companies in the automotive and auto parts industry in Mexico, analyzing the data set using confirmatory factor analysis and structural equation models. The results obtained follow that the circular economy has a significant positive impact on the growth level of small manufacturing firms in the automotive and autoparts industries.