The Organizational Adoption of Circular Economy Practices Among UAE SMEs

Abstract

This study examines the elements influencing the adoption of circular economy (CE) practices among small and medium-sized enterprises (SMEs) in the UAE. Drawing on various innovation adoption models, the research explores factors that illuminate the motivation and intention of UAE-based SMEs to embrace CE practices. In this investigation, the study introduces a novel construct termed organizational motivation and refines the existing construct of top management commitment. Additionally, the study examines the relationships between organizational intention and the actual adoption of CE practices. To achieve the research aims and objectives, data from 438 SMEs in the UAE were collected. The study employed both covariance (CB-SEM) and partial least squares (PLS-SEM) structural equation modeling for hypothesis testing. The findings reveal that all 16 proposed hypotheses were statistically significant. These results indicate that the propensity of SMEs to adopt CE technologies is rooted in specific organizational motivations. The choice of CE technology aligns closely with the SMEs’ organizational motivations, which are influenced by both internal and external pressures. Internal pressures include top management commitment and organizational facilitating factors, while external pressures encompass stakeholder pressure and additional organizational facilitating factors. V The research findings unveil several groundbreaking insights, which are thoroughly discussed in the theoretical and managerial implications section. Offering valuable suggestions for policymakers and top management in SMEs, this study stands out as one of the few empirical investigations into the components driving the adoption of CE technology among SMEs. The proposed research framework model could provide guidelines for managers in making informed decisions regarding CE adoption and for academicians as a reference for future studies.

Keywords Circular Economy, SME, Organizational Motivation, Sustainability, Intention, Adoption, UAE