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Environmental degradation in emerging economies has induced stakeholder pressures on diverse firms to ensure sustainable business performance. Consequently, firms are adopting environmentally ethical cultures and reinforcing green creativity to satisfy stakeholders' environmental needs while attaining green competitive advantage, sustainable production and higher financial performance. The purpose of this study is to investigate whether corporate environmental ethics and green creativity serve as antecedents to higher competitiveness, sustainable production and financial performance, and also examine if green competitive advantage and sustainable production mediate the relationships between corporate environmental ethics, green creativity and financial performance in the context of an emerging economy.

This study using a survey approach examined data from 290 manufacturing small and medium-sized enterprises. Data were analyzed and interpreted using SmartPLS 3.0 software, a variance-based structural equation modelling technique. This modelling technique was adopted due to its suitability for predictive research models.

The findings show that corporate environmental ethics and green creativity are critical antecedents to green competitive advantage, sustainable production and financial performance. The results connote that while corporate environmental ethics and green creativity directly and robustly influence green competitive advantage, sustainable production and financial performance, their effect on financial performance is strengthened via the indirect effects of green competitive advantage and sustainable production. Contrasting past findings, corporate environmental ethics negatively related to financial performance in this study context. The findings indicate that the integration of environmental ethics and green creativity can be a unique strategy for mitigating environmental negative risks while improving green competitive advantage, sustainable production and financial performance.

The study is among the few that draws insights from organizational ethics and the natural resource-based view (NRBV) to examine the interactions between corporate environmental ethics, green creativity, green competitive advantage, sustainable production and financial performance. Drawing insights from the findings, the study provides suggestions for managers, academicians, policymakers and governments as well as highlights implications and directions for future research.

Drawing on the resource-based view (RBV) and the dynamic capabilities view (DCV), this study investigates how circular economy entrepreneurship (CEE) drives technical capabilities (TC) in achieving greater circular economy (CE) performance for small and medium-sized enterprises (SMEs) under the moderating influence of environmental dynamism. SMEs, facing resource constraints, need to promote CE due to growing stakeholder pressures. Thus, the authors recommend that SMEs via CEE can identify CE opportunities and then develop specific TC to exploit opportunities in the business environment to achieve CE performance. However, in doing so SMEs should pay attention to the varying degrees of environmental dynamism.

The RBV and DCV are used as a theoretical lens to investigate the direct and moderation effects between CEE, TC, CE performance and environmental dynamism tested via partial least square structural equation modeling (PLS-SEM) using survey data from 152 managers of SMEs in Nepal.

The study results show that CEE directly has a positive and significant effect on the development of TC and CE performance. Similarly, the development of TC drives SMEs to achieve improved CE performance, as evidenced by the positive and significant effect. Interestingly, the results suggest that environmental dynamism significantly improves the relationship between TC and CE performance, but this effect is strongest at high levels of environmental dynamism rather than at low and moderate levels. Additionally, the findings reveal that while environmental dynamism has a positive effect on the relationship between CEE and TC, this effect is insignificant.

Based on the arguments of the RBV and the DCV, this study explores how environmental dynamism can reduce and amplify SMEs' ability to use CEE to develop TC and improve CEP. First, this study integrates the circular economy and entrepreneurship domains to suggest essential CEP and TC benefits for SMEs via CEE. Second, this study suggests that at low levels of environmental dynamism, CEE has less effect on the SMEs’ development of TC, compared to high levels. Third, this study is conducted in the novel institutional context of Nepal, providing insights regarding how SMEs' CE entrepreneurship impacts TC and CEP.