Green servitization, circular economy, and sustainability a winning combination analysis through hybrid SEM‐ANN approach

Satirenjit Kaur Johl, Kashif Ali, Kunio Shirahada and Oyelakin Idris Oyewale

Business Strategy and the Environment, 2024, vol. 33, issue 8, 8978-8993

Abstract: To accomplish the 2030 Sustainable Development Goals (SDGs), the manufacturing industry faces significant hurdles, particularly in embracing green servitization and circular economy ideas and confronting the dearth of research on green servitization for sustainability. To fill this lacuna, this study examines the role of green servitization in promoting circular economy practices (CEPs) and sustainability in Malaysian manufacturing firms. A robust framework has been forged based on the natural resource‐based view (NRBV) theory. Data from a survey of 251 manufacturing firms (Malaysian and Japanese) were collected and analyzed using a hybrid methodology that included structural equation modeling and artificial neural network (SEM‐ANN). The research findings from SEM highlight that green servitization positively promotes CEP and sustainable performance. Furthermore, CEP has a mediating role between green servitization and sustainable performance. The ANN results indicate that CEP is the dominant predictor of sustainability dimensions. Unlike the prior research that theoretically assumes that all relationships are linear, this has been the nascent study that has successfully validated that there exists a nonlinear relationship in the NRBV framework. Based on the outcomes, study contributions, practical implications, and future research avenues have been discussed.

Date: 2024
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