Prioritizing zero-waste performance and green differentiation advantage through the Prism of circular principles adoption: A mediated approach

Circular economy has become one of the mainstream concepts to deal with environmental issues. However, research on the circularity theme (especially at the firm-level) is still evolving. Taking inspiration from the natural resource-based view and practice-based view theoretical lenses, this study proposes a research framework that explores the direct and indirect relationships between circular principles adoption, cleaner production, total quality environmental management, zero-waste performance and green differentiation advantage. The explanatory research design, with a questionnaire-based survey methodology was employed to address the focal objective of the study. Data for the study was drawn from Ghanaian manufacturing SMEs. The study utilizes partial least-square structural equation modelling (PLS-SEM) to test the hypothesized relationships and validate the proposed research model. The results suggest that circular principles adoption alone may have an insignificant impact on zero-waste performance and green differentiation advantage. However, circular principles adoption can lead to the effective implementation of cleaner production and total quality environmental management. The result also highlights that both cleaner production and total quality environmental management bring about significant influence on zero-waste performance and green differentiation advantage. The originality of this work stems from developing a novel research framework that establishes cleaner production and total quality environmental management as important indirect mechanisms through which circular principles adoption can significantly influence zero-waste performance and green differentiation advantage. Thus, to make sure circular principles adoption flourish, in terms of improving zero-waste outcomes and reinforce green differentiation advantage, SME managers in emerging countries need to synergistically implement cleaner production methods and total quality environmental management. The theoretical, managerial and policy implications of the study are also discussed