Psychological Factors Influencing Environmental Knowledge and their Impact on Indonesian Circular Economy Adoption

Asep Marfu (), Agung Purwanto (), Nadiroh (), Hafid Abbas (), Bagus Sumargo (), Septantri Shinta Wulandari (), Daiman (), Christin A. Malaihollo (), Syakyakirti (), David Tanubrata () and Dewi Indah Pratiwi ()
Additional contact information
Asep Marfu: Jakarta State University
Agung Purwanto: Jakarta State University
Nadiroh: Jakarta State University
Hafid Abbas: Jakarta State University
Bagus Sumargo: Jakarta State University
Septantri Shinta Wulandari: Primagraha University
Daiman: Politeknik STIA LAN Jakarta
Christin A. Malaihollo: Politeknik STIA LAN Jakarta
Syakyakirti: Politeknik STIA LAN Jakarta
David Tanubrata: Jakarta State University
Dewi Indah Pratiwi: Jakarta State University

Circular Economy and Sustainability, 2025, vol. 5, issue 4, 3369-3399

Abstract: Abstract This study aims to explore the psychological factors influencing the adoption of circular economy practices among Small and Medium Enterprises (SMEs) in Indonesia. Specifically, it examines the role of environmental knowledge, attitudes toward circular economy, motivation, social norms, perceived behavioral control, and risk perception. Using a quantitative approach with a cross-sectional design, the research involved 416 SME owners and managers from various industry sectors. Data were collected through questionnaires and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results indicate that attitudes toward the circular economy (β = 0.134, p = 0.001), motivation (β = 0.297, p = 0.001), social norms (β = 0.656, p = 0.000), and risk perception (β = 0.246, p = 0.007) significantly contribute to increasing environmental knowledge (EK). However, perceived behavioral control (β = -0.051, p = 0.769) does not significantly influence environmental knowledge. Furthermore, environmental knowledge does not significantly impact the adoption of circular economy practices (β = 0.650, p = 0.105). Mediation path analysis reveals that attitudes (β = 0.110, p = 0.041) and motivation (β = 0.193, p = 0.046) indirectly influence circular economy adoption through increased environmental knowledge. This study contributes to understanding the psychological drivers behind circular economy adoption in the Indonesian SME sector and offers valuable insights for policymakers and business owners to promote sustainable practices. This study addresses the research gap by highlighting the role of psychological factors in the adoption of the circular economy in Indonesia, which remains underrepresented in the literature. However, the reliance on self-reported data may introduce perception bias, requiring additional approaches for validation. The originality of this research lies in its focus on Indonesian SMEs, exploring how psychological factors can influence the uptake of circular economy practices in a developing country context, which has been underrepresented in existing literature. This study provides new perspectives on the adoption of circular economy principles in SMEs, offering practical recommendations to foster sustainable business practices.

Keywords: Circular economy adoption; Environmental knowledge; Psychological factors (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s43615-025-00563-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:circec:v:5:y:2025:i:4:d:10.1007_s43615-025-00563-x

Ordering information: This journal article can be ordered from
https://www.springer.com/journal/43615

DOI: 10.1007/s43615-025-00563-x

Access Statistics for this article

More articles in Circular Economy and Sustainability from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().