Examining the Factors Influencing the Level of Circular Economy Adoption in Agriculture: Insights from Vietnam

Abstract

The development of a circular economy in agricultural production has become a trend for many countries, especially as global natural resources worldwide are increasingly depleting. Therefore, the economic model transition to address the challenge of balancing economic growth and environmental protection, in general, and the plan for agricultural production development, in particular, is highly necessary. In this study, the authors examine the factors influencing the level of circular economy application in agriculture in Vietnam. The research employs a survey method using questionnaires to collect data from individuals and households engaged in the agriculture sector in Vietnam. Out of the 500 distributed questionnaires, 421 valid responses were collected. The influencing factors will be measured using a Likert scale, and to assess their reliability, the authors used Cronbach’s Alpha and inter-item correlation coefficients. To test the research hypotheses, the Structural Equation Modeling (SEM) method is utilized. The results reveal that among the factors included in the principal component analysis, financial factors have the strongest influence, followed by technological application, awareness, production scale, and finally, government policies. In summary, this study sheds light on the importance of various factors influencing the adoption of circular economy practices in agriculture. It can provide valuable information to policymakers, enabling them to make informed macro and micro-level decisions aimed at increasing the proportion of businesses applying circular economy principles in agricultural production.