Antecedents and Outcomes of Circular Economy Adoption in SMEs: A Systematic Review of Empirical Evidence

Abstract

The Circular Economy (CE) has turned out to be very helpful in fulfilling the needs for sustainable development and resource efficiency at different sectors of economy. Small and medium-sized enterprises (SMEs) are significant contributors to economic growth; however, their transition to CE has not occurred on large scale yet, the process is uneven and there are a number of hindrances (like organizational problems, financial barriers, technology-related issues, and institutional factors, etc.) to overcome. In light of the above-mentioned challenges in the field of CE adoption, this paper aimed to conduct a systematic review of the empirical (quantitative) literature relevant to the antecedents and outcomes of CE adoption by SMEs. The systematic analysis of Scopus database has shown that there were 783 empirical studies relevant to the topic indexed within the period of time between 2010 and 2025, among which 107 studies were selected for synthesis. The systematic review has demonstrated that the most influential factors that promote CE adoption are regulations, management support, capacity to innovate, market demands, and technological readiness versus the barriers encountered on the way to CE implementation such as lack of financial resources, insufficient experience, operational complexity, and limitations of policies. The research results indicate that CE adoption positively influences environmental sustainability, organizational efficiency, innovativeness and competitive advantages but the influence on finances still remains unclear and depends on the context of implementation. The research relied on the Triads of Institutional Theory, Resource-Based View, and Natural Resource-Based View. The results of this research make a contribution into the current knowledge of Circular Economy by consolidating and synthesizing the existing data on the topic and identifying the future directions for research.