Business Performance and Sustainability Outcomes Driven by Circular Economy, Eco-Innovation, and Sustainable Marketing

Aura Andrea Díaz Duarte (), Gabriel Puron-Cid and Marco Eliseo Rivera Martínez
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Aura Andrea Díaz Duarte: Centro de Investigación y Docencia Económicas, Aguascalientes 20313, Mexico
Gabriel Puron-Cid: Centro de Investigación y Docencia Económicas, Aguascalientes 20313, Mexico
Marco Eliseo Rivera Martínez: Escuela de Ciencias Económicas y Empresariales, Universidad Panamericana, Josemaría Escrivá de Balaguer 101, Aguascalientes 20296, Mexico

Sustainability, 2025, vol. 17, issue 21, 1-19

Abstract: Sustainable practices are increasingly recognized as critical drivers of business performance in contemporary markets. This study examines the influence of Circular Economy (CE), Eco-Innovation (EI), and Sustainable Marketing (SM) on Business Performance (BP) among micro, small, and medium-sized enterprises (MSMEs) located in Aguascalientes, Mexico, a representative emerging-economy context within Latin America. The relationships among these constructs were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) in SmartPLS 4.0. Results show that CE significantly drives both EI and SM, and that EI positively influences BP. However, the direct effect of SM on BP was marginal, indicating that its contribution to business performance is weaker than that of circular and eco-innovative practices in the analyzed sample. Among CE dimensions, enablers were the strongest driver of circular adoption, while in EI, adoption incentives exerted the greatest influence. This research contributes to the sustainability and management literature by rigorously analyzing and comparing the relative impact of different sustainability-oriented strategies—circular, innovative, and marketing-based—on business performance. By examining how these strategies interact and differ in their effects, the study offers evidence-based guidance for MSMEs with limited resources to prioritize initiatives with greater potential to enhance competitiveness. The proposed integrated CE–EI–SM–BP framework, validated through a predictive PLS-SEM approach (PLSpredict), provides robust empirical evidence from an underexplored emerging-economy context. The results also open avenues for future research to examine contextual or temporal factors influencing the effectiveness of sustainability-based strategies.

Keywords: circular economy; eco-innovation; sustainable marketing; business performance; micro, small, and medium enterprises (MSMEs); structural equation modeling (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:17:y:2025:i:21:p:9858-:d:1787672

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