Modeling the Drivers of Green and Circular Economy Practices and Their Impact on Sustainable Development: Evidence from SEM Analysis

Authors

DOI:

https://doi.org/10.31305/rrijm2025.v05.n04.011

Keywords:

Green economy practices, Circular economy practices, Sustainable development performance, Regulatory pressure, Technological innovation

Abstract

The growing emphasis on environmental sustainability has compelled small and medium-sized enterprises (SMEs) to adopt green and circular economy practices to enhance long-term performance. This study investigates the influence of regulatory pressure, stakeholder pressure, top management commitment, and technological innovation on green economy practices (GEP) and circular economy practices (CEP), and their subsequent impact on sustainable development performance (SDP). Quantitative research design was employed using convenience sampling, and data were collected from 345 SME respondents. Structural equation modeling (SEM) was applied to test the proposed hypotheses. The results reveal that regulatory pressure and top management commitment significantly influence green economy practices, while stakeholder pressure and technological innovation positively affect circular economy practices. Furthermore, both green and circular economy practices significantly enhance sustainable development performance. The findings highlight the combined role of institutional forces and internal organizational capabilities in driving sustainability transformation within SMEs. The study contributes to sustainability literature by integrating green and circular economy perspectives into a unified framework and offers practical insights for managers and policymakers seeking to strengthen sustainable development outcomes in the SME sector.

Author Biography

  • Dr. Shalendra Singh Rao, Assistant Professor, Department of Banking & Business Economics, Mohanlal Sukhadia University, Udaipur

    Dr. Shalendra Singh Rao received his Bachelor of Commerce (B.Com.) and Master of Commerce (M.Com.) in Economics, Administration & Financial Management (E.A.F.M.) from the University of Rajasthan, Jaipur, India. He also completed a Diploma in Co-operation from the University of Rajasthan and qualified the UGC-NET in Commerce in 2013. He obtained his Ph.D. Degree in Economics, Administration & Financial Management from the University of Rajasthan, Jaipur, India. He is currently working as Assistant Professor in the Department of Banking & Business Economics, University College of Commerce & Management Studies, Mohanlal Sukhadia University, Udaipur, Rajasthan, India, since May 2018. His areas of expertise include Public Finance, International Trade & Finance, Economic Environment, and Indian Banking System. He has published numerous research papers in reputed national and international journals and conference proceedings indexed in Scopus, including journals such as Finance India, Springer, and IEEE. He has also co-authored an edited book titled Advances in Commerce and Management (Disha International Publications, New Delhi, ISBN: 978-93-91251-01-7). He holds an ORCID profile (https://orcid.org/0000-0003-4801-4236) and has a published patent on Financial Monitoring Data in Enterprise Knowledge Management (Application No: 202241004013, 2022).

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Published

2025-12-31

Issue

Vol. 5 No. 4 (2025): RRIJM [OCT-DEC]

Section

Articles

How to Cite

Rao, S. S. (2025). Modeling the Drivers of Green and Circular Economy Practices and Their Impact on Sustainable Development: Evidence from SEM Analysis. Revista Review Index Journal of Multidisciplinary, 5(4), 73-82. https://doi.org/10.31305/rrijm2025.v05.n04.011