Circular economy practices in locally rooted family SMEs: the role of the socio-spatial context

This paper examines whether family-owned SMEs differ from non-family SMEs in their adoption of circular economy (CE) practices, with a focus on how these differences are shaped by socio-spatial contexts. Specifically, we investigate the role of a firm’s rural or urban location and the level of country environmental awareness. Using a sample of 13,319 SMEs, we find that family ownership increases the probability of adopting a higher number of CE practices. Furthermore, we find that the positive effect of family ownership on the adoption of CE practices is stronger in rural areas. Finally, while both family and non-family SMEs are more likely to adopt CE practices in countries with greater environmental awareness, non-family SMEs appear to be relatively more influenced by this factor. These findings offer new insights into the intricate interplay of ownership and the socio-spatial context as determinants of the adoption of CE practices in SMEs.