Can the Adoption of Circular Economy Practices Foster Supply Chain Resilience and Performance Improvements?

Roberta Pellegrino, Barbara Gaudenzi, Luca Fraccascia, Andrea Genovese and Luigi Jesus Basile

Business Strategy and the Environment, 2026, vol. 35, issue 1, 438-457

Abstract: While a growing literature is showing interest in the circular economy (CE) paradigm, there is still a lack of consensus on whether the adoption of CE practices can help to cope with supply risks arising from an increasingly uncertain business environment in order to increase supply chain resilience (SCRES) and improve a firm's performance. Through a survey of Italian enterprises engaged with CE practices, this study aims to fill this literature gap, investigating whether the adoption of CE practices can initiate a path of increased SCRES, which can lead firms to improve their overall performance, thus proactively responding to environments characterised by high levels of supply risk. This study contributes to the debates about the paths connecting CE practices and firms' performance, especially in the context of vulnerabilities and disturbances, empirically demonstrating how firms might exploit the potential of CE by investing in SCRES. This study sheds light on the relationship between CE and SCRES, particularly underlying the most relevant paths of relationships between CE and those SCRES capabilities that can lead to performance improvements, particularly when the level of supply risk increases.

Date: 2026
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