Interplay in Circular Economy Innovation, Business Model Innovation, SDGs, and Government Incentives: A Comparative Analysis of Pakistani, Malaysian, and Chinese SMEs
Round 1
Reviewer 1 Report
The paper entitled "Interplay in Circular Economy Innovation, Business Model Innovation, SDGs, and Government Incentives: A Cross-Country Comparison” assessed and analyzed the impact of circular economy innovation, business model innovation and government incentives on the economic, environmental and social performance of SMEs in Pakistan, Malaysia and China. For this purpose, the authors used an online survey and applied the PLS-SEM methodology. The authors showed that both circular economy and business model innovations have a positive impact on the economic, environmental and social performance of SMEs.
The paper is well-written and quite interesting to read, especially in terms of the circular economy and sustainable development, which have an ever-increasing impact on the surrounding reality.
However, I have the following reservations about the article:
What are the limitations of the study stemming from the data collection methods? When was the survey carried out?
In section 3.1 more information could have been provided as to who in the businesses completed the form. Did you collect additional information about the characteristics of the companies? Do you have data on the type of firm - what type of business does the surveyed company do, like the industry?
How did you take into account the diversity of SMEs in terms of activities in the countries analyzed? Have you considered that, for example, sending surveys to SMEs in the food sector might yield different results compared to the surveys received from SMEs in the electronics sector?
Additionally, don't you think that certain sectors of the economy (and companies) are better subsidized by governments than others which may have influenced the survey results?
Please also consider minor technical issues:
- when the abbreviation "BMI" first appears - please explain it (its meaning in brackets); the abbreviation "SME" is quite common in use, but for the order, you can also write out the abbreviation on first occurrence. Please note the other abbreviations used in the article.
- notorious missing spaces e.g., in lines 35, 45, 59, 153, 160, 163, 193 - please pay attention to this.
- minor language corrections required e.g., line 152 - semicolon is unnecessary; line 158 - verb incorrectly conjugated; often quite complex and long sentences - could be made simpler.
Author Response
Reviewer-1
Comments and Suggestions for Authors
The paper entitled "Interplay in Circular Economy Innovation, Business Model Innovation, SDGs, and Government Incentives: A Cross-Country Comparison” assessed and analyzed the impact of circular economy innovation, business model innovation and government incentives on the economic, environmental and social performance of SMEs in Pakistan, Malaysia and China. For this purpose, the authors used an online survey and applied the PLS-SEM methodology. The authors showed that both circular economy and business model innovations have a positive impact on the economic, environmental and social performance of SMEs.
The paper is well-written and quite interesting to read, especially in terms of the circular economy and sustainable development, which have an ever-increasing impact on the surrounding reality.
However, I have the following reservations about the article:
Dear Reviewer, Thank you very much for the review of our article and your respected comments….. I wish you and your family health, happiness and reassurance of stability. I appreciate your efforts to give valuable suggestions on our manuscript. A big Thank You
What are the limitations of the study stemming from the data collection methods? When was the survey carried out?......Please the study was limited only to the Resource-based View theory, while the application of contingency theory and stakeholder theories can display a different shape of the results as shown in the conclusion
In section 3.1 more information could have been provided as to who in the businesses completed the form. Did you collect additional information about the characteristics of the companies? Do you have data on the type of firm - what type of business does the surveyed company do, like the industry? …. Please, Table.1 Presents the complete profile information’s of the firms in term of industries, age, size etc.
How did you take into account the diversity of SMEs in terms of activities in the countries analyzed? Have you considered that, for example, sending surveys to SMEs in the food sector might yield different results compared to the surveys received from SMEs in the electronics sector?.......Please, this study has selected the industries of chemical, software, pharmacy, engineering, cosmetics, electronics to collect a more diverse information’s of the industries in all the countries
Additionally, don't you think that certain sectors of the economy (and companies) are better subsidized by governments than others which may have influenced the survey results?
Please, this study has focused on the general subsides of government for all the industries and firms to boost up the economics, environmental, and social efficiencies among communities.
Please also consider minor technical issues:
- when the abbreviation "BMI" first appears - please explain it (its meaning in brackets); the abbreviation "SME" is quite common in use, but for the order, you can also write out the abbreviation on first occurrence. Please note the other abbreviations used in the article.
- notorious missing spaces e.g., in lines 35, 45, 59, 153, 160, 163, 193 - please pay attention to this.
Please, the abbreviation of BMI and SMEs are explained in the first part of abstract to clarify the confusion of readers……Please, we also focused to address the issues of spaces in all the parts of article
- minor language corrections required e.g., line 152 - semicolon is unnecessary; line 158 - verb incorrectly conjugated; often quite complex and long sentences - could be made simpler.
Please, we tried our best to improve the language style of the paper in order to increase the interest of readers.
Thank you once again for your respected comments
Reviewer 2 Report
The scientific work from Fazal ur Rehman et al. describes the effect of circular economy policy on SMEs economic in Pakistan, Malaysia, and China. The results show a positive effect of the circular economy. In my opinion, this work is of wide interest because circular economy is the current hot topic in Europe and also worldwide. I suggest the publication after minor revision, I would like the authors to consider the following comments before recommending publication in Sustainability journal:
- Considering your findings, could you suggest how to boost the impact on SMEs? As instance with new flexible products DOI: 10.1109/RTSI50628.2021.9597272
- Considering the sample chosen, are the respondents influenced by the information that the data will be used for research and publication?
Minor corrections:
There is no authors’ names below the title.
Author Response
Reviewer-2
Comments and Suggestions for Authors
The scientific work from Fazal ur Rehman et al. describes the effect of circular economy policy on SMEs economic in Pakistan, Malaysia, and China. The results show a positive effect of the circular economy. In my opinion, this work is of wide interest because circular economy is the current hot topic in Europe and also worldwide. I suggest the publication after minor revision, I would like the authors to consider the following comments before recommending publication in Sustainability journal:
- Dear Reviewer, Thank you very much for the review of our article and your respected comments….. I wish you and your family health, happiness and reassurance of stability during this challenging time. I appreciate your efforts to give valuable suggestions on our manuscript. A big Thank You
Considering your findings, could you suggest how to boost the impact on SMEs? As instance with new flexible products DOI: 10.1109/RTSI50628.2021.9597272
Please, the government assistance in term of circular economy innovation and BMI could lead SMEs to achieve economic, environmental, and social efficiencies. In this scenario, the private and public sector partnership would be wise strategy to boost the trend of circular innovation….as highlighted in the practical implication part of this study.
- Considering the sample chosen, are the respondents influenced by the information that the data will be used for research and publication?
Please, now it is a common trend among SMEs to help researchers in term of data collection due to increasing trend of universities and industries partnership to achieve their mutual goals…..so, majority of the SMEs are cooperating in providing data ……..Sometime researchers approach to SMEs through their colleagues to collect data………… and it is not a big issue particularly in Pakistan, China, and Malaysia
Minor corrections:
There are no authors’ names below the title.
Please, all the information’s of the authors are presented below the title of the study
Thank you once again for your respected comments and guidance
Reviewer 3 Report
REVIEWER'S COMMENTS
Congratulations to the authors. The article addresses very interesting aspects that SMEs need to address, especially in these times.
Below are some comments and considerations to evaluate before publication.
TITLE
The study has been conducted in Pakistan, Malaysia, and China. In my opinion, the three countries should appear in the title because the expression “cross-country” is too generic.
ABSTRACT
The abstract seems adequate and I have no comments for this section.
INTRODUCTION
The study was conducted in the context of Pakistan, Malaysia, and China. Therefore, the data provided for the UK do not seem to me to be extrapolated (lines 38, 39, and 40). I think that the data on SMEs in the countries mentioned should be lower.
The resource-based view theory is presented as a theoretical framework (line 96). However, Barney's (1991) work is not cited in this section. It is indeed given a subheading in the following section, but it is interesting to add in the introduction.
THEORETICAL BACKGROUND AND HYPOTHESIS DEVELOPMENT
I have conducted research in CSR and I agree that practices such as innovation in circular economy are a source of competitive advantage (line 117). But, I think this section can be developed a bit more (i.e. it is a more economical and therefore more efficient way of production). There is a huge amount of literature on the subject.
METHODOLOGY
If I am not mistaken the sample size for each country (Pakistan, Malaysia, and China) has not been shared. I think this is a relevant piece of information.
RESULTS
In my opinion, the PLS-SEM survey data are not well presented. Its main weakness is that indicators of good fit are missing.
In the CFA I do not find indicators such as Cronbach’s alpha (reliability of the latent variables), Fornell–Larcker criterion for test discriminant validity (the correlations between each pair of latent variables must not exceed the square root of the AVE of each of the latent variables).
The evaluation of the structural model lacks indicators such as SRMR, NFI, chi-square (and degrees of freedom), RMSE, MAE,…
I suggest that the authors examine the bibliographic references listed below. It is not to follow the presentations but to examine some relevant data on the setting that the research should show.
Calvo-Mora, A., Blanco-Oliver, A., Roldán, J.L., & Períañez-Cristóbal, R. (2020). TQM factors and organisational results in the EFQM excellence model framework: an explanatory and predictive analysis. Industrial Management and Data Systems, 120(12), pp. 2297-2317. https://doi.org/10.1108/IMDS-12-2019-0701
Gimeno-Arias, F., & Santos-Jaén, J. M. (2022). Using PLS-SEM for assessing negative impact and cooperation as antecedents of gray market in FMCG supply chains: an analysis on Spanish wholesale distributors. International Journal of Physical Distribution & Logistics Management, (ahead-of-print). https://doi.org/10.1108/IJPDLM-02-2022-0038
Sarstedt, M., Hair, J. F., Pick, M., Liengaard, B. D., Radomir, L., & Ringle, C. M. (2022). Progress in partial least squares structural equation modeling use in marketing research in the last decade. Psychology & Marketing, 39(5), 1035-1064. https://doi.org/10.1002/mar.21640
Schuberth, F., Rademaker, M. E., & Henseler, J. (2022). Assessing the overall fit of composite models estimated by partial least squares path modeling. European Journal of Marketing, (ahead-of-print). https://doi.org/10.1108/EJM-08-2020-0586
DISCUSSION
Government Incentives on Environmental Performance (Malaysia) is “Not Supported” (H3b). In my opinion, an explanation should be provided as to what it entails and what consequences it has for hypothesis H3b.
CONCLUSION AND FUTURE DIRECTIONS
I have no comments for this section.
I again congratulate the authors for the research work. I believe it has potential if the exposed weaknesses are worked on.
Author Response
Reviewer-3
Comments and Suggestions for Authors
REVIEWER'S COMMENTS
Congratulations to the authors. The article addresses very interesting aspects that SMEs need to address, especially in these times.
Below are some comments and considerations to evaluate before publication.
Dear Reviewer, Thank you very much for the review of our article and your respected comments….. I wish you and your family health, happiness and reassurance of stability during this challenging time. I appreciate your efforts to give valuable suggestions on our manuscript. A big Thank You
TITLE
The study has been conducted in Pakistan, Malaysia, and China. In my opinion, the three countries should appear in the title because the expression “cross-country” is too generic.
Please, the tile of the study has highlighted all the three countries
ABSTRACT
The abstract seems adequate and I have no comments for this section.
Thank you very much for giving positive comments on the abstract of our study.
INTRODUCTION
The study was conducted in the context of Pakistan, Malaysia, and China. Therefore, the data provided for the UK do not seem to me to be extrapolated (lines 38, 39, and 40). I think that the data on SMEs in the countries mentioned should be lower……Please, the data regarding UK is just presented as an example to highlight the issues among SMEs around the world …and support to validate the existing problem among SMEs in many countries…..
The resource-based view theory is presented as a theoretical framework (line 96). However, Barney's (1991) work is not cited in this section. It is indeed given a subheading in the following section, but it is interesting to add in the introduction.
Please, the work of Barney’s (1991) is cited in the last part of introduction as per the respected advice of the reviewers
THEORETICAL BACKGROUND AND HYPOTHESIS DEVELOPMENT
I have conducted research in CSR and I agree that practices such as innovation in circular economy are a source of competitive advantage (line 117). But, I think this section can be developed a bit more (i.e. it is a more economical and therefore more efficient way of production). There is a huge amount of literature on the subject.
Please, the study has now extended this portion and highlighted the role of resource-based theory in production efficiencies.
METHODOLOGY
If I am not mistaken the sample size for each country (Pakistan, Malaysia, and China) has not been shared. I think this is a relevant piece of information.….Please the sample information for each country is now more clear and concise.
RESULTS
In my opinion, the PLS-SEM survey data are not well presented. Its main weakness is that indicators of good fit are missing.
In the CFA I do not find indicators such as Cronbach’s alpha (reliability of the latent variables), Fornell–Larcker criterion for test discriminant validity (the correlations between each pair of latent variables must not exceed the square root of the AVE of each of the latent variables).
Please, the values of Cronbach’s Alpha are included in the Table.3 ……..and all the diagonal values of discriminant validity as shown in Table.4 are greater in the concerned rows and columns…..some other information regarding results are presented in the appendix section
The evaluation of the structural model lacks indicators such as SRMR, NFI, chi-square (and degrees of freedom), RMSE, MAE,…
Please we added some results in the appendix section
I suggest that the authors examine the bibliographic references listed below. It is not to follow the presentations but to examine some relevant data on the setting that the research should show.
Calvo-Mora, A., Blanco-Oliver, A., Roldán, J.L., &Períañez-Cristóbal, R. (2020). TQM factors and organisational results in the EFQM excellence model framework: an explanatory and predictive analysis. Industrial Management and Data Systems, 120(12), pp. 2297-2317. https://doi.org/10.1108/IMDS-12-2019-0701
Gimeno-Arias, F., & Santos-Jaén, J. M. (2022). Using PLS-SEM for assessing negative impact and cooperation as antecedents of gray market in FMCG supply chains: an analysis on Spanish wholesale distributors. International Journal of Physical Distribution & Logistics Management, (ahead-of-print). https://doi.org/10.1108/IJPDLM-02-2022-0038
Sarstedt, M., Hair, J. F., Pick, M., Liengaard, B. D., Radomir, L., &Ringle, C. M. (2022). Progress in partial least squares structural equation modeling use in marketing research in the last decade. Psychology & Marketing, 39(5), 1035-1064. https://doi.org/10.1002/mar.21640
Schuberth, F., Rademaker, M. E., &Henseler, J. (2022). Assessing the overall fit of composite models estimated by partial least squares path modeling. European Journal of Marketing, (ahead-of-print). https://doi.org/10.1108/EJM-08-2020-0586
DISCUSSION
Government Incentives on Environmental Performance (Malaysia) is “Not Supported” (H3b). In my opinion, an explanation should be provided as to what it entails and what consequences it has for hypothesis H3b.
Surprisingly, we noted that government incentives have weak positive and insignificant effects on the environmental performance among SMEs in Malaysia. Perhaps the Malaysian government is not widely focusing on building the science parks and SDGs incubators in poor communities. May be the Malaysian government is not giving significant attention to the evaluation of Suppliers…….as highlighted at the end of page 3.
CONCLUSION AND FUTURE DIRECTIONS
I have no comments for this section.
I again congratulate the authors for the research work. I believe it has potential if the exposed weaknesses are worked on.
Thank you very much for giving positive comments on our study, and your respected guidance to improve the quality of this paper
Round 2
Reviewer 3 Report
- Accepted after review
