Corporate Governance and Sustainable Circular Economy with Eco-Innovation as Mediator and Customers’ Pressure as Moderator

Abstract

In the context of speed up economic development, numerous environmental and social issues have emerged. Existing research primarily concentrates on circular economy (CE) and sustainability to solve these problems, but the relationship between CE and sustainability is tenuous. Sustainable circular economy (SCE) was proposed to strengthen the relationship between CE and sustainability. However, research on SCE remains dispersed and insufficient. To comprehensively explore SCE at company level, this research proposes a conceptual framework how corporate governance affect SCE based on resource-based view. In this framework, corporate governance factors (gender and generational diversity of the board, foreign ownership, institutional ownership, CEO with business educational background, and CEO tenure) can positively affect SCE through the mediation role of eco-innovation, and customers’ pressure can positively moderate the relationship between corporate governance and eco-innovation. This article fulfils the lack of research on SCE, and it provides company managers with decision-making guidance to improve corporate governance structure to enhance SCE performance.