Complementarity of circular economy practices: an empirical analysis of Chinese manufacturers

Abstract

In recent years, circular economy (CE) is receiving increasing attention worldwide and is intended to integrate economic activity and environmental wellbeing in a sustainable way. The CE mainly focuses on both the front (eco-design, ECO) and back ends (reverse activities, RA) of operations and production at the firm level. However, what is missing in the literature are the synergistic effects between the two practices on corporate social responsibility (CSR) performance. Drawing on systems theory, this paper used panel data of Chinese manufacturing firms over the period from 2013 to 2015 that was collected from Chinese Research Data Services Platform (CNRDS) and Rankins CSR Ratings (RKS) databases and performed a series of regression tests to see whether complementarity exists between them and their effects on CSR performance. The results show significant complementarity between ECO and RA in improving CSR performance. Furthermore, building on systems theory, three kinds of enablers are identified as essential for promoting the interaction of subsystems and the complementarity of ECO and RA, including CSR vision as an internal enabler within the system, an environmental management system as a system regulation, and supply chain cooperation as an external enabler from the environment.

Keywords:

• circular economy
• complementarity
• eco-design
• reverse activities
• systems theory
• secondary data analysis

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 http://about.hm.com/en/sustainability.html.

2 http://www.dell.com/learn/us/en/uscorp1/dell-environment.

3 The sample begins in 2013 since the Chinese government made a vital announcement on the Circular Economy Development Strategy and Immediate Action Plan at that time, which made concrete plans for the work in the coming period. The authors consider data only until 2015 because the newest data on CSR performance from the RKS database is from that year.

4 http://pdf.dfcfw.com/pdf/H2_AN201604280014609537_01.pdf.

5 The specific details can be downloaded from http://www.rksratings.cn/index.php/Index/Report/detail/id/73, the pdf file name is “MCT 2012_1.2i version”.

6 http://pdf.dfcfw.com/pdf/H2_AN201603220014022154_1.pdf.