An extended institutional theory perspective on the adoption of circular economy practices: Insights from the seafood industry

Abstract

The management of seafood processing by-products (SPBPs) is an interesting but underexplored topic in the circular economy (CE) research stream. The extant CE literature is mainly devoted to the topic's theoretical aspects and largely neglects the linkages between theory and practice, particularly in developing countries. This paper aims to empirically investigate CE implementation and its associated drivers and barriers in the context of SPBP management in a developing country. A multiple-case design is used on a sample of five firms that engage in SPBP treatment in Vietnam. We find evidence of circular practices in SPBP management that aim at cascading use and higher value creation. We also delineate eight drivers and 14 barriers rooted in four clusters: regulatory, socio-cognitive, economic and supply chain, and technological factors. In addition to generic factors, we identify three exclusive drivers and five unique barriers specific to our cases. The findings are then interpreted through the lens of extended institutional theory to derive a holistic framework that captures the dynamic influences of various factors on CE diffusion. Our framework includes two add-ons: institutional logic and uncertainty. ‘Legitimacy-embedded efficiency’ is established as a shared logic of CE, whereby economic growth is achieved in harmony with environmental protection via the optimal use of resources. Uncertainty moderates the relative influences of legitimacy and efficiency-related factors on CE diffusion. Our practical contribution is to offer an actionable guide for key stakeholders of the SPBP supply chain, including local authorities in the transition from low-efficiency practices to novel circular ones.