From Linear to Circular: Role of Business Strategy for Green Transition in Mexican Automotive Industry

The adoption of the circular economy is considered in literature as one of the essential strategies for improving both sustainable performance and green strategies. However, despite the importance and various benefits of adopting circular economy practices, both in manufacturing companies and in society in general, under this context, and to improve our understanding of the factors that facilitate the transition from a linear economy to a circular economy, this study aims to fill this gap in the literature and explore the effects of the circular economy on the adoption of green strategies from a sustainability perspective, for which a survey was distributed to a sample of 300 manufacturing companies in the automotive industry in Mexico, and the proposed research model was validated through the use of the PLS-SEM. The results obtained suggest that circular economic practices have a positive impact on sustainable performance, as well as green strategies. Likewise, green strategies have a positive impact on sustainable performance but also act as a vehicle in the relationship between the circular economy and sustainable performance.