Seminario académico «Demystifying Circular Economy Implementation: Evidence from a Large-Scale Survey of Latin American Firms»

Abstract: The circular economy (CE) is widely promoted as a pathway to decouple economic activity from environmental degradation, yet large scale firm adoption remains low and empirical evidence is concentrated in the Global North, where coercive regulation is typically cast as the dominant institutional driver. Whether this canonical pressure hierarchy travels to weak-enforcement contexts remains unresolved. This study examines which institutional pressures actually drive CE implementation in Latin American firms, and whether internal capabilities or external embeddedness better explains adoption. Integrating institutional theory and the dynamic capabilities view, we draw on survey data from 1,079 large firms across Chile, Colombia, Argentina, Brazil, and Mexico, analyzed through confirmatory factor analysis and covariance-based structural equation modeling (CB-SEM) across eight specifications. Institutional pressures robustly predict CE implementation, but their composition inverts mainstream expectations: normative and mimetic pressures dominate, coercive regulatory pressure underperforms, and coercive market pressure is effectively dormant. Dynamic capabilities show a null effect, and institutional pressures significantly buffer the negative effect of implementation barriers. These findings establish a boundary condition for dynamic capabilities theory and reframe CE adoption in emerging economies as institutionally embedded, driven by normative and mimetic forces rather than state coercion.