Shirking in supply chain collaborations: do circular economy entrepreneurship and technical capability moderate impacts for circular economy performance?

Purpose Small and medium-sized enterprises (SMEs) in emerging economies are encouraged to form supply chain collaborations (SCC) for better circular economy (CE) performance. Yet, the literature remains silent on SMEs’ susceptibility to opportunistic behaviors of supply chain (SC) partners. This study draws on the transaction cost theory (TCT) and the resource-based view (RBV) to investigate the impact of shirking on SCC and CE performance while exploring how circular economy entrepreneurship (CEE) can curb the impacts of shirking on SCC as well as drive technical capability (TC) to moderate the relationship between SCC and CE performance. Design/methodology/approach The TCT and RBV are used as a theoretical lens to investigate the direct, mediation and moderation effects tested via partial least square structural equation modeling (PLS-SEM) using survey data from 152 managers of SMEs in Nepal. Findings Contrary to past findings, the study results show that shirking, directly and indirectly, has a positive and significant impact on SCC and CE performance, respectively. The results also show that as CEE, which positively and significantly drives TC, moves from low to high levels, the effect of shirking on SCC dampens, and as TC moves from low to high levels, the effect of SCC on CE performance intensifies. Originality/value This study’s contribution lies in extending the shirking debate to the CE domain and also in identifying CEE and TC as potent means for SMEs in emerging economies to mitigate shirking impacts and induce SC partner commitments in CE-driven SCC. This study provides relevant theoretical and practical insights.