From Environmental Orientation to Circular Economy Practices: Is It Easier When Firms Frequently Cooperate With Stakeholders?

ABSTRACT Nowadays, firms are expected to adopt an environmental orientation and circular economy (CE) practices for sustainability. Nevertheless, since most small and medium‐sized enterprises (SMEs) have insufficient resources and capabilities to adopt these practices alone, they have sought to adopt them through cooperation, considering that the frequency with which an enterprise cooperates with stakeholders may increase the probability that its environmental orientation leads to the adoption of CE practices. Using a sample of 300 SMEs, this article examines the positive influence of environmental orientation in the adoption of CE practices (i.e., CE‐based design for production, CE‐based manufacturing, CE‐based service provision, and CE‐based communication) and whether the frequency of cooperation with stakeholders strengthens this relationship. The results show that an environmental orientation and the frequency of cooperation with stakeholders effectively influence firms' adoption of these practices in the predicted way, which has important implications in the policy and managerial spheres.