Diversity of Cooperation Networks and Environmental Orientation in Spanish SMEs Transitioning to Circularity

Firms are increasingly adopting circular economy (CE) practices to meet the growing demand for sustainability, but most small and medium-sized enterprises (SMEs) have been unable to adopt them due to limited resources, capabilities, and a lack of environmental culture. However, SMEs with an environmental orientation and diverse cooperation networks tend to find this adoption easier. This article examines the role of environmental orientation and the moderating effects of cooperation with diverse networks on the adoption of the following CE practices: CE-based service provision, CE-based communication, CE-based design for production, and CE-based manufacturing. The study is based on a survey conducted with managers from 300 SMEs in the Spanish manufacturing sector. The results, analyzed through structural equation modeling, confirm that both environmental orientation and the diversity of cooperation networks significantly influence the adoption of CE practices among SMEs. These findings have significant implications for business managers, urging them to adopt an environmental orientation and diversify their cooperation networks to access the resources necessary to implement CE practices. Furthermore, policymakers are encouraged to promote the diversification of SME cooperation networks, for example, by fostering partnerships through incentives that support digital platforms for these interactions, ultimately contributing to a more sustainable economy.