Antecedents and performance outcomes of circular procurement: An empirical study in China

Abstract

Traditional procurement approaches and their prescribed business-as-usual practices are no longer sufficient in the face of society’s grand environmental and resource challenges. In response, this research presents circular procurement, which is grounded in the circular economy (CE) philosophy, as a business-not-as-usual approach to firm and supply chain level purchasing decisions. Drawing on institutional theory and the practice-based view of strategy, a conceptual model is developed that maps the antecedents as well as performance outcomes of circular procurement practices in terms of the environmental and economic (i.e., cost and financial) dimensions of performance. Survey data from 255 Chinese manufacturers is then analyzed alongside qualitative data from two post-survey case studies to achieve better interpretation of survey results. The findings indicate that coercive pressures and integrated management systems (IMS) are key antecedents of circular procurement practices among Chinese manufacturers. Furthermore, circular procurement practices show a significant and positive effect on environmental, cost, and financial performance. Interestingly, the association between environmental performance and circular procurement is relatively weak in comparison to economic performance. This research provides empirical evidence of the performance outcomes of circular procurement and contributes to the literature by advancing our understanding of its theoretical foundations. It further provides important practical and policy guidelines that can help to enhance the development of circular procurement.