IMPACT OF CIRCULAR ECONOMY PRACTICES ON GREEN CREATIVITY: MEDIATING ROLE OF EMPLOYEE GREEN COMMITMENT

Abstract

The purpose of this study is to investigate the impact of circular economy practices on green creativity, mediated by employee green commitment, in the manufacturing sector of Pakistan. To test the proposed hypothesis, primary data were collected using a questionnaire adapted from previous studies. A total sample of 199 top management-level individuals was considered. The gathered data were tested in SmartPLS version 3 through structural equation modeling. Findings of this confirmed that all direct paths, such as circular economy practices, have a positive and significant impact on both green creativity and employee green commitment. Similarly, employee green commitment has a positive and significant impact on green creativity. Additionally, the partial mediation effect of employee green commitment on the relationship between circular economy practices and green creativity was also confirmed.  Such findings indicate that although circular practices have a direct beneficial effect on environmental innovation, most of them work by enhancing employees' commitment to environmental sustainability. The practical implications also suggest that manufacturing companies should integrate circular economy practices and mitigation measures to encourage their workforce on the environmental front, such as participatory green programs and sustainability-based reward schemes. In the case of Pakistan, where the industrial sector generates most of the pollution, this dual strategy will provide the sector with a platform to achieve operational sustainability and a competitive edge simultaneously through eco-innovation. The paper will contribute to the sustainable business literature by providing empirical evidence to support the psychological processes that connect organizational practices and environmental creativity, particularly in the context of an emerging economy.