Guest editorial: Navigating the role of circular economy in entrepreneurship: opportunities and challenges – part one

Citation

Mardani, A., Song, M., Chiappetta Jabbour, C.J. and Farzipoor Saen, R. (2024), "Guest editorial: Navigating the role of circular economy in entrepreneurship: opportunities and challenges – part one", Management Decision, Vol. 62 No. 8, pp. 2329-2339. https://doi.org/10.1108/MD-08-2024-221

1. Introduction and background

Entrepreneurship growth is continuously tied to improving the economy of the country, society and people (Adeel et al., 2023; Funko et al., 2023; Huang et al., 2022; Schiavone et al., 2020). Entrepreneurship contains enterprising and opportunity-seeking people who could realize business opportunities and are capable enough to respond to them, notwithstanding the existing assets and resources (Dana et al., 2022; Gulsia and Yadav, 2023; Tubulingane, 2020; Zuazua Ruiz et al., 2023). Among a diversity of methods developed for economic development by literature, economists, academics and scientists, a new concept of the circular economy (CE) has appeared to aid industries and businesses in generating dual profits (Jakhar Suresh et al., 2019; Singh Sanjay and Singh Ajai, 2019). The entrepreneurial idea is realized as an essential portion of realizing a company or a firm (Chen et al., 2023; Witt, 2007; Zhao et al., 2023). Consequently, it is vital to evaluate why entrepreneurs are involved in start-up development; in this case, entrepreneurs work within the CE concept.

The CE concept has become an increasingly discussed subject in industries and businesses; officeholders still fight to implement CE plans (Singh Sanjay and Singh Ajai, 2019; Singhal et al., 2019). According to Zamfir et al. (2017), circular economy practices (CEP) at the firm level can include aiming at waste reduction while maintaining the value of resources and products in the system to achieve entrepreneurial sustainability. Whereas in recent years, circular entrepreneurs have been highlighted in different industries and organizations, a few studies have been conducted to understand why and how these entrepreneurs are generating start-ups inside the CE. Meanwhile, the concept of the CE is a novel and still emerging arena of study (Alonso-Almeida et al., 2020; Makropoulos et al., 2018; Zhu et al., 2019); the literature argues that the circular entrepreneur could be an innovative kind of entrepreneur. Meanwhile, they might hold diverse viewpoints on critical developments and characteristics typically understood inside founders engaging in start-up development. Consequently, understanding an entrepreneur’s motivation to join in the CE’s plans is significant for efforts to entrepreneurial development in this different alternative economy (Colin David, 2020; Yang et al., 2023).

The objectives of this special issue (SI) included:

• (1)

  To deliver an extensive contribution to the literature by presenting discussions for understanding an entrepreneur’s motivation to join in the CE’s plans.

• (2)

  To provide state-of-the-art literature on how entrepreneurs might be generating start-ups within the CEP.

In this SI, we received 65 submissions in the fields of CE and entrepreneurship. In the following section, we presented an overview of the papers in this SI. We then summarize what we have learned as a whole from the research and theory covered.

2. Overview of papers

In the first paper, Le et al. (2024) examine the mechanism of how CEP and CE entrepreneurship (CEE) promote sustainable supply chain management (SCM) and facilitate sustainable performance (SP) for small and medium-sized enterprises (SMEs) in the food value chain in the emerging economy. Smart partial least squares (PLS) version 3.3.2 was employed to analyze structural equation modeling (SEM) to investigate the relationships between constructs and latent variables. The results of the analysis indicated that sustainable SCM mediates the link between CEP and SP.

In the second paper, Botella-Carrubi et al. (2024) investigated the role of entrepreneurial skills as a vehicle for business growth. Accordingly, this research refers to an individual’s skills’ impact on the entrepreneurial environment. For this purpose, a survey has been developed of employees of different organizations, considering the variables of the high degree of proactivity in the employees’ attitude, entrepreneurial training, innovation, previous experience or risk aversion. The research has been conducted through fuzzy set qualitative comparative analysis (fsQCA), and the result shows the differences between the combination of variables for business growth through the consideration of sales growth and profit. The research demonstrated the combinations of variables that allow the organization to grow. Based on the configurations, new predictive models of BG can be developed. The five proposed conditions have been analyzed in relation to two perspectives, i.e. considering the impact on the growth of the company through the level of sales or increase in profit.

In the third paper, Saura et al. (2024) analyzed whether the use of the digital reservation system in circular entrepreneurship businesses has an impact on entrepreneurs’ satisfaction and trust in the CE. The data collected via a survey of 317 entrepreneurs using a CE strategy were analyzed using SEM in a proposed model based on circular entrepreneurship businesses and adopting digital reservation systems. The results showed a positive relationship between usability, perceived ease of use and user satisfaction and trust in using digital reservation systems to boost circular entrepreneurship in hospitality. Therefore, it was identified that adopting a digital reservation system can increase the efficiency of entrepreneur resources as well as lead to the creation of sustainable knowledge, augment the use of new sources of user information, improve the prediction of services and demand and, consequently, boost sustainability and CE.

In the next paper, Li and Yu (2024) examined the effects of two types of improvisational strategic orientation on new venture performance: defensive improvisation and creative improvisation. Moreover, this study investigates the role of entrepreneurial bricolage in mediating the transition from various types of improvisational strategic orientation to new venture performance. This study is designed as quantitative research, employing a structural equation model and bootstrap analysis to empirically test the survey data of 249 new ventures gathered to investigate the true relationship between variables in this paper. The findings of this study show that (1) both defensive and creative improvisation positively affect the performance of new ventures, with defensive improvisation having a stronger positive effect; (2) both internal and external bricolage positively affect new venture performance and play varying degrees of intermediary roles in the influence that defensive and creative improvisation have on the performance of start-ups.

In the next article, Khan et al. (2024) developed a decision model to determine a suitable configuration for entrepreneurial orientation to help small firms manage CE challenges and improve their performance. This study used a multi-study and multi-method approach. Study 1, through qualitative in-depth interviews, identified a portfolio of CE challenges and entrepreneurial orientation components. Study 2 applied the quality function deployment technique to determine the most important components of entrepreneurial orientation. Study 3 adopted an fsQCA to determine the best configuration for challenges and components. The findings revealed a set of challenges and identified the salient need to combine the negation of these challenges with the components of entrepreneurial orientation; this combination will improve the performance of small firms. The research extends current knowledge of managing CE challenges and offers decision-makers insights into improving their resilience.

In the next article, Zhu and Tao (2024) investigated the impact of economic policy uncertainty on corporation innovation in innovative cities. The study sheds light on different results from the previous literature by testing the moderator effects of entrepreneurial risk appetite on such an impact. A static panel estimator is applied to a Chinese sample of 416 firm-year observations from 2010 to 2019. This paper uses a regression model to test the impact of uncertainty on enterprise innovation in innovative cities and to test the regulatory role of entrepreneurial risk appetite. The results of this study found reliable evidence that economic policy uncertainty can encourage corporations to invest more in research and development (R&D) in innovative cities. In addition, the role of the entrepreneurial initiative is significant, and there is a positive moderating effect of entrepreneurial risk appetite between policy uncertainty and corporation innovation.

In the next paper, Luo et al. (2024) set out to understand the key issues that the various functions and optimal allocation of non-governmental organizations (NGOs) in the CE that provide public services depend not only on external quantities or densities but also on their internal size of human resources. The paper uses different data samples and models to study the influence mechanism of the optimal NGO size of human resources and its differentiated effects on the governance quality of entrepreneurship. The results of this study found that a reduction in transaction costs and an increase in the aggregation degree of public demand lead to increased human capital and lower financial capital intensity. In addition, the authors find that NGO size of human resources has a relationship that is approximately U-shaped (or inverse U-shaped) with the governance quality of entrepreneurship.

In the next article, Tian (2024) examined the role of entrepreneurship, cooperative innovation and environmental investment in the relationship between the Belt and Road Initiative (BRI) and green innovation upgrading using data on Chinese firms between 2009 and 2021. The study adopted the staggered difference-in-difference (DID) method to estimate regressions, treating the proposal of the BRI in 2013 as a policy shock. The findings of this study show that the BRI can significantly promote Chinese firms’ green innovation upgrading. Specifically, the BRI can promote firm green innovation upgrading by 0.9%. Second, the BRI mainly promotes firms green innovation upgrading by promoting firms to increase green entrepreneurship, cooperative innovation and environmental investment. Finally, the BRI has a greater impact on the green innovation upgrading of firms in the digital industrialization industry than the digital industry and firms with low pollution emissions and firms with high pollution emissions. This research indicates that the BRI is an important platform for sustainable development and an opportunity for green entrepreneurship.

In the paper, Wang et al. (2024) examined the relationship between mass entrepreneurship network embeddedness and the entrepreneurial innovation performance of high-tech enterprises. In this study, a conceptual model of the influence of network embeddedness on the innovation performance of high-tech enterprises in Guangdong province is established, which takes the business model as the mediating variable and political association as the moderating variable. Multivariate statistical analysis and the MacKinnon confidence interval method were used to analyze 418 questionnaires. The results showed that relational and structural embeddedness have significant and positive effects on the innovation performance of high-tech enterprises in Guangdong Province. The business model partially mediates between the relationship embeddedness, structure embeddedness and innovation performance of high-tech enterprises in Guangdong Province, respectively. Political relevance has a significant negative moderating effect on the relationship between embeddedness and innovation performance of high-tech enterprises in Guangdong Province, but the moderating effect on structural embeddedness and innovation performance of high-tech enterprises in Guangdong Province has not been verified.

Dastane et al. (2024) explored customer perceived value (CPV) dimensions in the context of free mobile educational applications (EduApps), which are paramount in learning-based digital start-ups and are essential for the implementation of CE. The purpose of the present study is to identify dimensions of CPV specifically for EduApps and propose a conceptual model that would assist digital start-up decisions, which in turn can be a catalyst in navigating to a CE. The study uses the netnography approach by analyzing online user-generated content. A total of 13,147 reviews posted on the Google Play Store after using the top free education apps were coded using ATLAS.ti 9 software. Major dimensions of context-specific CPV are identified as technical value, content value, pedagogical value, gamification value and learning value. Subdimensions and items are extracted for each of these dimensions.

Cheng et al. (2024) investigated the effect of digital transformation on intrapreneurship in Chinese real-economy enterprises. This study developed and tested a theoretical model that digital transformation impacts intrapreneurship by promoting working capital turnover and further influencing labor input. Panel data from 1,638 Chinese-listed companies between 2007 and 2020 were used to complete the empirical test. The results of this study found that digital transformation impacted labor input with an inverted U-shaped relationship between the two, and labor input significantly stimulated intrapreneurship. This effect promoted labor input’s impact on working capital. Chinese real economy enterprises generally increase labor investment to promote intrapreneurship. Heterogeneity analysis revealed that enterprises’ asset scale and ownership attributes uniformly affected labor input.

Shengdong et al. (2024) introduced a stacking algorithm to solve the underfitting problem caused by insufficient data in traditional machine learning; this paper provides a new solution to the cold start problem of entrepreneurial borrowing risk control. The authors introduced semi-supervised learning and integrated learning into the field of migration learning. They innovatively proposed the stacking model migration learning, which can independently train models on entrepreneurial borrowing credit data and then use the migration strategy as the learning object and the stacking algorithm to combine the prediction results of the source domain model and the target domain model. The results of this paper indicated that the effectiveness of the two migration learning models is evaluated with real data from entrepreneurial borrowing. The algorithmic performance of the stacking-based model for migration learning is further improved compared to the benchmark model without migration learning techniques, with the model area under curve value rising to 0.8. Comparing the two migration learning models reveals that the model-based migration learning approach performs better. This is because the sample-based migration learning approach only eliminates the noisy samples that are relatively less similar to the entrepreneurial borrowing data. However, the calculation of similarity and the weighing of similarity are subjective, and there is no unified judgment standard and operation method, so there is no guarantee that the retained traditional credit samples have the same sample distribution and feature structure as the entrepreneurial borrowing data.

Al-Omoush et al. (2024) examined the impact of digital corporate social responsibility (CSR) on social entrepreneurship, organizational resilience and competitive intelligence during the coronavirus disease 2019 (COVID-19) crisis. It also examines the impact of competitive intelligence on social entrepreneurship and organizational resilience. Data were collected from telecommunication companies in Jordan with a sample of 223 managers, using Smart-PLS for analysis and testing the research model and hypotheses. The results reveal a significant impact of digital CSR on social entrepreneurship. They show that digital CSR significantly impacts organizational resilience. The findings also indicate a significant role of digital CSR in competitive intelligence. This study shows that social entrepreneurship significantly impacts organizational resilience. The results also confirm the impact of competitive intelligence on social entrepreneurship. Finally, the results confirm that competitive intelligence significantly impacts organizational resilience.

Skare et al. (2023) evaluated the relationship between income and the recycled materials used in order to rate the business related to circular repair services under the burden of economic development in the countries of the European Union. The analytical processes explore data from 2010 to 2020. The countries were divided into clusters according to economic maturity [Human Development Index (HDI) and real gross domestic product (GDP) per capita]. Subsequently, the relationships were evaluated through the income indicators (for the 13 population groups), and the circular materials use rate indicator. The three indicators were decomposed into five specific metrics and employed. The commonly applied characteristics of the descriptive analysis, Pearson’s correlation coefficient and the panel regression analysis were engaged in the investigation. The results demonstrated the vast disparities between income and circular materials use. In more economically developed countries, their levels were twice as high as the less-developed countries. However, there is a meaningful positive relationship between them. The greatest attention was paid to the panel regression analysis applied to the relationship between income and CE use. The results showed that in a majority of the cases (different income categories), there is a significant positive relationship. When comparing the outcomes of the regression models between the groups of countries according to their economic development, a closer relationship was clearly demonstrated in the countries with a lower level of development (Bulgaria, Romania, Croatia and Hungary).

Wu et al. (2023) investigated the relationship between bribery and product innovation performance for female-led start-ups and the roles of institutional support and self-control in this link. This empirical study evaluated survey data from female-led manufacturing start-ups in China’s Yangtze River Delta region to investigate the relationship between bribery and product innovation performance. This research shows that bribery has an inverted U-shaped impact on product innovation performance in female-led manufacturing start-ups, meaning that the product innovation performance of these firms initially increases but then decreases as the bribery intensity (i.e. the frequency and amount of bribes) increases. The authors also focus on the roles of institutional support and self-control in this link, where they find that this relationship is steeper for firms with strong institutional support and for individual female entrepreneurs with high self-control levels.

Other submissions in this SI are

“Achieving Circularity is a Distant Dream: Entrepreneurial Barriers to Circular Business Models in SMEs of Emerging Economies”. This study identified the various barriers and sub-barriers for circular entrepreneurs to adopt circularity in SMEs in emerging economies. A combined qualitative and quantitative approach was employed to achieve the objectives of the study. In the first stage, through an extensive literature review, a list of barriers was identified, and in the second stage, a deductive approach was employed to finalize the barriers. Finally, the best-worst method (BWM), a multi-criteria decision-making (MCDM) method, was used to analyze the significant importance of the barriers. The findings of the study suggested the “financial barrier” as the first-ranked barrier in the adoption of circular business models (CBMs), followed by the “regulatory and operational barriers” as the top second and third barriers. In terms of sub-barriers, a “lack of access to funding and capital” has been identified as the top sub-barrier in the adoption of CBM, followed by “excessive regulations and red tape” and “challenges due to ambiguity of the concept.”

The title of another article is “Transitioning Drivers from Linear to Circular Economic Models: Evidence of Entrepreneurship in Emerging Nations.” This study identified the drivers of circular economies and their contribution to entrepreneurship in developing countries. This study conducted a comprehensive quantitative literature review based on LangChain to identify the critical CE drivers from social, technological and organizational perspectives. Based on the input from the expert panel of Iranian academic and industry professionals, we applied an integrated fuzzy interpretive structural modeling and cross-impact matrix multiplication approach to classification (Fuzzy-ISM-MICMAC) to investigate the chronology of entrepreneurial drivers. Level-based model results reveal entrepreneurial drivers in developing nations and their interrelationships, specifically underlining the importance of supply chain factors and stakeholder preferences. Thus, the differences between the perceptions of the main drivers in developed and developing economies can be identified, with the former paying particular attention to legislative and financial factors.

The title of the next paper is “Sustainability-based Enterprise Supply Chain Optimization and Response under Circular Economy Approach: Agile, Adaptive, and Coordinated.” This paper first analyzed some typical supply chain projects in China and summarizes the main features of these projects. Secondly, considering the benefits of the project and the stakes of each project, a multi-stage stochastic programming model is established. Finally, Cplex, nested decomposition, Local Solver and other methods are adopted to simulate and analyze the model. The final experimental results demonstrate the importance of coordinating multiple CE supply chain projects to increase the value of the entire supply chain. The multi-stage stochastic programming model presented in this research can provide an effective tool for logistics enterprises and third-party logistics companies to optimize their investment decisions and maximize their profits in the context of a CE. This manuscript found that investing in other projects in the supply chain can broaden the scope of business and increase the value of the entire supply chain. Third-party logistics companies are gradually participating in the construction and operation of many projects. This study also highlighted the importance of coordinating multiple supply chain projects to increase the value of the entire supply chain. The multi-stage stochastic programming model presented in this research can provide a useful tool for logistics enterprises and third-party logistics companies to optimize their investment decisions and maximize their profits.

The title of another article is “Exploring the Impact of Industrial Robots on Firm Innovation under Circular Economy Umbrella: A Human Capital Perspective.” This study investigated whether robot adoption affects technological innovation and how human capital plays a role in this relationship in the era of the CE. Based on the robot adoption data from the International Federation of Robotics (IFR) and panel data from China’s listed manufacturing firms from 2011 to 2020, this study uses regression models to test the impact of industrial robots on firm innovation and the mediating role of human capital. The results demonstrate that the adoption of industrial robots can significantly promote high-quality innovation. Specifically, a one-unit increase in the number of robots per 100 employees is associated with a 13.52% increase in the number of invention patent applications in the following year. The mechanism tests show that industrial robots drive firm innovation by accumulating more highly educated workers and allocating more workers to R&D jobs. The findings are more significant for firms with low market concentration, labor-intensive industries and regions with a shortage of high-end talent.

The title of another paper in this SI is “Corporate Strategic Positioning and Environmental Information Disclosure under Circular Economy: Evidence from China.” This study is intended to investigate the relations between corporate strategic positioning and environmental information disclosure (EID) behaviors in the CE context. We argue that the development of the CE is crucial to address environmental issues and achieve sustainable development, and companies play a vital role in this process as micro-entities. By examining corporate EID behaviors, we could understand their adoption of circular practices to a certain extent. This study conducted a content analysis of companies’ annual fiscal reports, social responsibility reports and environmental reports and developed text-based proxies for strategic positioning and EID quality to explore their relationship. The results of this study found that corporate strategic positioning does affect corporate EID behaviors. Specifically, firms that implement a prospector strategy are more likely to engage in high-quality EID. Furthermore, our results suggest that green innovation is one of the mediators through which strategic positioning affects EID. Compared with defenders, prospectors are more likely to engage in green innovation, which, in turn, leads to higher-quality EID and demonstrates a more active approach to the CE.

Another paper in this SI is “An ISM-DEMATEL analysis of blockchain adoption decision in the circular supply chain finance context.” This study provided a series of drivers that prompt blockchain technology adoption decisions in circular supply chain finance (SCF) and also assessed their degrees of influence and interrelationships, which led to the construction of a theoretical model depicting the influence mechanism of blockchain technology adoption decisions in a circular SCF. This study mainly uses the technology-organization-environment (TOE) framework, which focuses on aspects based on the nature of innovation, intraorganizational characteristics and extra environmental consideration, to identify the drivers of blockchain adoption in circular SCF context, while the significance and causality of the drivers are explained using ISMs and the decision-making trial and evaluation laboratory (DEMATEL) method. The findings of this study indicated that government policy and technological comparative advantage are the underlying reasons for blockchain technology adoption decisions and management commitment and financial expectations are the critical drivers of blockchain technology adoption decisions, while other factors are the receivers of the mechanism.

Another article published under this SI is “Blockchain technology-based crypto assets: New insights into the evolution of the understanding of digital entrepreneurship.” This study shed light on the concepts most addressed in scientific research, which blockchain topics are of most interest, how relevant are these tools for academia and how relevant are they? The authors have developed a bibliometric study of scientific publications on blockchain made since 2016. The VOSViewer software version 1.6.19 has been used for the analysis, allowing a statistical analysis of scientific publications on the subject. This study provided a complete and updated picture of the scientific research on blockchain for the subsequent transfer of knowledge to the business world.

Another paper in this study is “The impact of the industrial robots on the employment rate and wages: Prospects of circular economy and sustainable development.” This study investigated whether increasing robot adoption will affect employment rates and wages and contribute to the world’s economic cycle and sustainable development. This study introduced a two-way fixed effect model and an ordinary least squares (OLS) model to evaluate the influence based on relevant data from the 18 countries with the largest robot stocks and robot densities in the world from 2006 to 2019 to test the influences and do the robustness test and endogeneity test by using empirical models. The research findings suggested that increasing robot adoption can cause strong negative impacts on employment for both males and females in these economies. Second, the effect of robots on reducing job opportunities has penetrated different industries. It means that this negative impact of robots is comprehensive for the industry. Third, robot adoption can have a strong positive influence on wages and increase workers’ incomes.

The next article’s title is “Revolutionizing Supply Chain and Circular Economy with Edge Computing: Systematic Review, Research Themes, and Future Directions.” This article examined how the implementation of edge computing can enhance the progress of CE within supply chains and address the challenges and best practices associated with this emerging technology. This study utilized a streamlined evaluation technique that employed latent Dirichlet allocation modeling for thorough content analysis. Extensive searches were conducted among prominent publishers, including IEEE, Elsevier, Springer, Wiley, MDPI and Hindawi, utilizing pertinent keywords associated with edge computing, CE, sustainability and supply chain. The search process yielded a total of 103 articles, with the keywords being searched specifically within the titles or abstracts of these articles. There has been a notable rise in the volume of scholarly articles dedicated to edge computing in the CE and SCM. After conducting a thorough examination of the published papers, three main research themes were identified, focused on technology, optimization, CE and sustainability. Edge computing adoption in supply chains results in a more responsive, efficient and agile supply chain, leading to enhanced decision-making capabilities and improved customer satisfaction. However, the adoption also poses challenges, such as data integration, security concerns, device management connectivity and cost.

The last paper in this SI is “The Path Analysis of Entrepreneurship Impacts on Circular Economy in Emerging Markets: A Mediating Role of Digital Technology.” This study explored the impact of the firm’s entrepreneurship on the transformation of the CE. The role of entrepreneurship is thought to be important for the process of the four Rs in the CE, and the authors have tried to study the role and impact path of entrepreneurship in the CE. Empirical data from Chinese listed firms are collected, and a measure of digital technology is constructed by the text mining method. A mediation analysis method is used to test the proposed hypothesis. The results show that innovation entrepreneurship has a significant positive impact on the CE, and digital technology is playing a mediating role in the impact path. However, business entrepreneurship is negatively affecting the CE adoption. Also, the proportion of shares held by the institution has a heterogeneous influence on innovation entrepreneurship.

3. Conclusion

In the entrepreneurial area, presently, numerous founders are trying to generate circular start-ups (Henry et al., 2020), and programs and awards precisely focused on supporting this cluster of circular players are growing. Presently, there are few studies on this novel type of entrepreneurs. To do so, in this SI, we attempted to better understand how the transition toward the concept of the CE is formed through its entrepreneurial actors and how the founders engaging in this area vary from their usual entrepreneurial counterparts. Therefore, in this SI, we have received 65 submissions. From these 65 submissions, 26 articles have been published. We published several high-quality submissions with different and hot topics related to the theme of SIs, such as digital CSR, social entrepreneurship, entrepreneurial skills as a vehicle for business growth, digital transformation on intrapreneurship, entrepreneurial motivation to participate in the CE, education apps for better entrepreneurial decisions, stakeholder pressure to drives the CE, CE entrepreneurship, strategic orientation and entrepreneurial bricolage, human resources and governance quality of entrepreneurship in the CE, digital reservation systems to enable CE in entrepreneurship, entrepreneurial risk appetite, entrepreneurial borrowing, entrepreneurship network embeddedness, entrepreneurial innovation performance, bribery, female-led start-ups and product innovation performance and other related topics about CE and entrepreneurship.

And finally, we wanted to take a moment to express our sincere gratitude for your invaluable feedback and comments on submissions. Your thoughtful and insightful comments have been invaluable in helping us and the authors improve their submissions. Your attention to detail and willingness to provide constructive criticism have been appreciated.