This study explores the role of external pressure, engagement capability (ENC), alliance capability (ACA), environmental sustainability commitment (ESC), and circular supply chain capability in circular economy performance.
Through a cross-sectional survey and data collected from 124 small and medium enterprises (SMEs) in Ghana, this study employs partial least square structural equation modelling (PLS-SEM) to test the proposed model.
The findings reveal the following; first, external pressure has a significant impact on ESC. Second, ESC positively impacts ACA, ENC and circular supply chain capability. Third, ACA and ENC mediate the relationship between ESC and circular supply chain capability. Finally, circular supply chain capability has a significant impact on circular economy performance.
The originality of this study lies in testing a novel model that confirms that SMEs respond to external pressure by enhancing ESC as well as develop engagement and alliance capabilities to improve circular supply chain capability to achieve circular economy performance goals.
