Motivators and barriers of circular economy business model adoption and its impact on sustainable production in Malaysia

Lim Sin Ting; Suhaiza Zailani; Noor Zahirah Mohd Sidek; Mohd Rizaimy Shaharudin

doi:10.1007/s10668-023-03350-6

Motivators and barriers of circular economy business model adoption and its impact on sustainable production in Malaysia

Environ Dev Sustain. 2023 May 23:1-28. doi: 10.1007/s10668-023-03350-6. Online ahead of print.

Authors

Lim Sin Ting¹, Suhaiza Zailani¹, Noor Zahirah Mohd Sidek², Mohd Rizaimy Shaharudin³

Affiliations

¹ Faculty of Business and Economics, University of Malaya, Lembah Pantai, 50603 Kuala Lumpur, Malaysia.
² Faculty of Business Management, Universiti Teknologi MARA, 08400 Kedah, Malaysia.
³ Smart Manufacturing Research Institute (SMRI) and Faculty of Business and Management, Universiti Teknologi MARA, 40450 Shah Alam, Selangor Malaysia.

Abstract

The circular economy concept is popular among developed countries contributing to sustainable production, efficient resource utilization, a new economic model, and higher skill job creation. In production and consumption, it is inevitable in our modern life that we are used to the traditional linear economy cradle-to-cradle model. With the gap in developing countries within the Southeast Asia region, this research aims to understand the motivators and barriers to circular economy business model adoption among the manufacturing firms in Malaysia. Subsequently, the impact of sustainable production will be studied based on the circular economy business model adoption. Using the Theory of Planned Behavior and Partial Least Squares Structural Equation Modeling, this study assesses the responses of 102 respondents from various industries with environmental management systems within Malaysia. Survey-based primary data was gathered to understand motivators and barriers that negatively influence the circular economy business adoption, affecting sustainable production. The findings show that motivators have a positive impact while barriers have a negative impact on circular economy business model adoption. Apart from the barriers and motivators, the research also assesses the level of circular economy adoption among manufacturing firms with certified environmental management systems. This implies a general overview for manufacturing firms in Malaysia regarding circular economy adoption and contributes to the studies done in developing nations. In conclusion, motivators positively impact the adoption of the circular economy business model, while barriers have a negative effect. In addition, adopting the circular economy model has a positive relationship with sustainable production.

Keywords: Barrier; Circular economy; EMS firms; Motivator; Sustainable production.

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