Circular Economy Readiness and Sustainable Value Creation: A Moderated Mediation Model of Green Intellectual Capital and Environmental Uncertainty

ABSTRACT

This paper examines the relationship between circular economy readiness (CER) and sustainable value creation (SVC), as well as the mediation between CER‐SVC by green intellectual capital (GIC) and the moderation between CER‐SVC by environmental uncertainty (EU) in the context of natural resource‐based view (NRBV). The sample (341 employees in the manufacturing companies) was gathered using a convenience sampling method and the hypotheses were verified by means of the partial least squares structural equation modelling (PLS‐SEM). The results show that CER has a positive influence on SVC‐GIC. Additionally, GIC acts as a link between CER‐SVC and therefore its nature is crucial as a non‐tangible strategic asset that enables organizations to turn circular initiatives into sustainability related outcomes. Besides, EU's mediated relationship was strengthened when environmental conditions were high, thereby confirming the importance of dynamic aspect of environment when implementing the efficiency of circular economy (CE) strategies. This study further extends the NRBV by introducing a theory‐informed discussion of the process of transforming organizational preparedness for CE practices into sustainable value: GIC as the knowledge‐based instrument of the process and EU as the boundary condition. The paper is a combination of GIC‐EU, the NRBV and contributes to the existing literature on the subject of CE and sustainability strategy. The results also provide significant input for managers of the organizations interested in strengthening the sustainability performance through the development of green intellectual resources and EU responsiveness.