Interplay in Circular Economy Innovation, Business Model Innovation, SDGs, and Government Incentives: A Comparative Analysis of Pakistani, Malaysian, and Chinese SMEs

Abstract

This study aims to examine the effects of circular economy innovation and BMI (business model innovation) on SMEs (Small and Medium Enterprises) economic, environmental, and social performance along with the mediating role of government incentives in Pakistan, Malaysia, and China. Data were collected through a structured questionnaire in online survey from the owners, CEO, and senior managers of SMEs in Pakistan, Malaysia, and China, and analyzed using PLS-SEM. The results revealed that circular economy innovation and BMI have positive significant effects on SMEs economic, environmental, and social performance in Pakistan, Malaysia, and China. The study also found that government incentives have mediating effects on the relationship between circular economy innovation, BMI, and SMEs economic, environmental, and social performance in Pakistan, Malaysia, and China. This study provides interesting insights about SMEs economic, environmental, and social performance by evaluating the impacts of circular economy innovation, BMI, and amid mediation of government incentives. These useful insights will enable policy makers and practitioners to develop more effective strategies to enhance the economic, environmental, and social performance of SMEs. By reviewing the literature on circular economy innovation, BMI, and government incentives, the main contribution of this study is the evaluation and analysis of circular economy innovation, BMI, and government incentives as they affect SMEs economic, environmental, and social performance in Pakistan, Malaysia, and China. The theoretical and practical implications for academics and practitioners are displayed at the end of the study.