INSTITUTIONAL PRESSURES AND CIRCULAR ECONOMY PRACTICES: A MEDIATED MODEL OF TRIPLE BOTTOM LINE PERFORMANCE IN ETHIOPIAN INDUSTRIAL PARKS

This study examines the effects of coercive, normative, and mimetic institutional pressures on the adoption circular economy (CE) practice among manufacturing firms located in Ethiopian industrial parks, and whether CE practices mediated institutional pressures with triple bottom line (TBL) performance. Under the institutional theory lens, a mediated model has been proposed to test with survey data across 308 firms at seven active industrial parks in Ethiopia. Employing covariance-based structural equation modeling, this research demonstrated that three kinds of institutional pressures had a positive and significant impact on the adoption of CE practices, and CE practices positively and significantly helped the performance in economic, social, and environmental aspects. Mediation analysis indicated that CE practices fully mediated the effects of mimetic pressure on all TBL dimensions and normative pressure on economic and environmental performance, while operating as a partial mediator for coercive pressure across all outcomes and for normative pressure on social performance. These findings suggest that institutional pressures alone are insufficient to generate performance dividends; rather, they must be internalized into concrete operational routines. The paper gives a regional relevant argument with empirical results of African developing context and policy implications for synchronizing institutional pressure and firm's capability.