EIX2003 RESEARCH METHODOLOGY

SESSION 2023/2024, SEMESTER 1

GROUP 19
GROUP ASSIGNMENT

TITLE:
DIGITAL TECHNOLOGY AND CIRCULAR ECONOMY PRACTICES:
A STRATEGY TO IMPROVE ORGANIZATIONAL PERFORMANCE

LECTURER:
DR. MUHAMMAD MEHEDI MASUD
ENCIK MUHAMAD HILMI BIN ABDUL RAHMAN

PREPARED BY:
NAME STUDENT ID

RAFIE BIN RAZLIN S2132442

ZUER CHEN S2116892

SHAFEEQA AIZA BINTI SAIFUL RIZAL U2102961

MUHAMMAD AFEEQ DANIEL BIN HENDRY U2102909

JOYSELLA FAYAKUN HANIFAH BINTI MOHD ALKAFF U2103033

SUBMISSION DATE:
16 JANUARY 2024
 TABLE OF CONTENT
1.0 Abstract 2
2.0 Introduction 3
3.0 Literature Review 5
3.1 “The role of block chain technology in circular economy practices to improve organizational
performance” 5
3.2 “Leveraging Blockchain and Smart Contract Technologies to Overcome Circular Economy
Implementation Challenges” 6
3.3 “Industry 4.0 and circular economy practices: A new era business strategies for environmental
sustainability” 6
3.4 “Towards circular economy in the textiles and clothing value chain through blockchain
technology and IoT: A review” 7
4.0 Hypothesis Development 9
4.1 Blockchain technology and circular economy practices 9
4.2 Circular Economy practice and organizational performance 10
5.0 Research Methodology 11
5.1 Research question 11
5.2 Conceptual Framework 11
5.3 Research Design 12
5.4 Data Collection 12
5.5 Data Analysis 13
6.0 Results and Findings 15
6.2 Descriptive Analysis of Demographics 16
6.3 Descriptive Analysis of Blockchain Technology (BCT) 18
6.3.1 Transparency and Information Sharing 18
6.3.2 Traceability 19
6.3.3 Data Security 20
6.3.4 Recycling and Remanufacturing 21
6.3.5 Positive Impact on CE 22
6.4 Descriptive Analysis of Circular Economy (CE) PracticesForms response chart. Question title:
Circular Purchasing. Number of responses: . 23
6.4.1 Recycling and Remanufacturing 23
6.4.2 Circular Purchasing 24
6.4.3 Circular Design 25
6.4.4 Organizational Performance 26
6.5 Descriptive Analysis of Organizational Performance 27
6.5.1 Organization’s Overall Performance 27
6.5.2 Organization’s Financial Performance 28
6.5.3 Organization’s Environmental Performance 29
6.6 Regression Results 30
5.6.1 Hypothesis testing 30
5.6.2 F-test 36
5.6.3 R-squared and Adjusted R-squared 37
7.0 Conclusion and Policy Recommendation 38
8.0 References 40

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1.0 Abstract
As environmental concerns continue to escalate, advanced technologies namely
Blockchain technology (BCT) have been seen to revolutionize circular economy (CE)
practices as well as established business models. Acknowledging the shift, this study delves
into the role of BCT in CE practices and its subsequent impact on the organizational
performance by gathering data from 30 respondents that comprise Malaysian-based
companies personnels from diverse industry sectors. Through the usage of an econometric
software called EViews to analyze our data deeper, our study unveils two crucial findings
such as BCT remarkably enhances CE practices which encompasses circular procurement,
circular design, recycling, and remanufacturing. Following that, it is also found that CE
practices effectively contribute to improved organizational performance. This study lays the
groundwork for participating companies to achieve both financial and sustainable objectives
by integrating BCT into their business operations to foster a brighter future.

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2.0 Introduction

Emerging technologies like blockchain technology, or BCT, have the power to

completely change society and its systems (Swan, 2015). When Nakamoto first introduced
the idea of blockchain in 2009, it was described as a technology that encodes information
transactions and builds data structures using data mining techniques. Transparency,
traceability, credibility, anonymity, mistrust, and decentralization are some of its salient
characteristics (Lu, 2019). According to published research, BCT can help with many
obstacles in the transition to a circular economy (CE) and support CE behaviors (Wang et al.,
2020). For example, several BCT characteristics including automation, dependability, and
transparency can efficiently support CE plans. Specifically, tracking devices and other apps
built on blockchain can improve tracing all the way through a product's life cycle.
Furthermore, blockchain features can improve circularity performance and facilitate the
execution of recycling programmes (Kouhizadeh et al., 2020).

The term circular economy or "CE" describes how traditional industrial processes are
changed to adopt a circular strategy that encourages recycling and reuse (Khan et al., 2021).
It is a regenerative strategy that aims to manage different energy and production loops,
reducing a number of issues like resource waste, energy leakage, and harmful emissions
(Geissdoerfer et al., 2017). In essence, a CE-based production system guarantees the highest
level of material and product functionality. According to Sehnem et al. (2019), this is how CE
practices specifically improve the efficient use of resources, which eventually raises the
firm's operational performance. By enabling appropriate waste management, resource
conservation, and effective financial utilization, the implementation of CE practices also
benefits organizations economically (Mangla et al., 2018).

The goal of manufacturing more things to meet market demands and gain profits has
driven the rapid industrial development since the 18th century, which has led to
socio-environmental issues, resource scarcity, environmental deterioration, and significant
waste generation. Recognising the circular economy's (CE) promise as a substitute economic
system that prioritizes sustainability, recycling, and reuse, it also underlines how CE is still
developing from both an application and research standpoint. It emphasizes how crucial it is
to apply CE effectively, which is dependent on tasks like maintenance, recycling,
refurbishing, reusing, and lasting design. For optimal CE functionality, tracing the whole
product life cycle becomes essential, which presents a significant challenge for academics,

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authorities, and businesses. Modern technologies, especially blockchain technology (BCT),
can be very helpful in addressing these issues and promoting CE standards. By promoting
information flow, transparency, and traceability throughout the whole product life cycle, the
integration of BCT is considered as a critical facilitator to overcome obstacles in the
implementation of CE.

There are two research objectives, namely to investigate the effect of BCT on CE
practices and to investigate the effect of CE practices on organizational performance. The
primary research question is how blockchain technology (BCT) impacts circular economy
practices and the secondary research question is what is the influence of circular economy
(CE) practices on organizational performance.

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3.0 Literature Review

Modern business models and circular economy (CE) practices are being
revolutionized by advanced technologies like blockchain technology (BCT). The paper
discusses the impact of BCT on organizational performance, as well as the influence of
enterprise performance management on enterprise performance management practice. The
literature that follows will provide more evidence regarding the contribution of BCT to CE
practice and the successful implementation of enterprise environmental performance
practices to raise organizational performance.

3.1 “The role of block chain technology in circular economy practices to

improve organizational performance”

This article centers on how blockchain technology can enhance organizational

performance in sustainable green supply chain practices (circular economy). The findings of
the article show that the emergence of blockchain technology plays a significant role in
transforming economic, environmental and organizational performance and circular
economy. Blockchain technology is characterized by relationship management, transparency,
visibility and smart contracts. The extremely transparent blockchain technology system offers
a continuous record and guards against double spending, asset fraud, and data manipulation.
Global SC management issues are made simple to use by blockchain technology, its
distributed digital ledger, and all of its dynamics. Blockchain technology is becoming
increasingly important as a result of ongoing pressure from domestic and international
manufacturers and consumers to meet the SDGs. The study employed structural equation
modeling to analyze cross-sectional data obtained from 290 respondents to a closed-ended
questionnaire survey of manufacturing companies. The findings demonstrate that blockchain
technology has a major influence on the circular economy; in particular, it has a favorable
effect on the three GSCM agents—green manufacturing, green design, and recycling and
remanufacturing. Organizations can benefit economically and environmentally from the
circular economy approach in GSCM. The circular economy has a substantial impact on both
environmental and economic performance. Environmental performance is also found to
positively correlate with the company's financial health, and it is discovered that improved
organizational performance is a result of both environmental and economic performance.

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3.2 “Leveraging Blockchain and Smart Contract Technologies to Overcome
Circular Economy Implementation Challenges”

This paper explores how blockchain and smart contract technologies, with or without
ICT, can solve CE problems. Blockchain provides a special and appropriate information
management system for CE's digital transformation that can guarantee data access, ownership
and sharing, privacy and property rights, trust and transparency among competitors, and
many other solutions. The traceability of blockchain can greatly help CE implementations
and their digital transformation, and its trustworthiness ensures that information is exchanged
in a transparent and secure manner. Data-driven tools with blockchain capabilities can help
CE business models become more transparent and trustworthy in terms of sharing and
performance economy platforms, supply chain networks, stakeholder engagement, and
organizational governance and management. This poses a number of research challenges for
those who believe that current discussions about the potential of blockchain to improve CE
will inevitably lead to successful CE implementations. Blockchains with a circular economy
have a large number of network stakeholders. Most stakeholders are concerned about data
protection and privacy when using blockchains. Practical problems with certain consensus
mechanisms and the execution of smart contracts are totally inappropriate in circular
economy applications involving a large number of sensing devices. Blockchain adoption in
CEB is hindered by organizational and cultural issues. Blockchain and CE, both ideas under
discussion, encounter legal and regulatory difficulties. Blockchain technology involves
financial decisions and combines hardware and software infrastructure. It is not simple to
implement. Since blockchain is still in its early stages, there may be concerns related to
skilled labor and financing of such training facilities.

3.3 “Industry 4.0 and circular economy practices: A new era business strategies
for environmental sustainability”

The article looks into how blockchain technology fits into circular energy practices
and how it affects environmental performance, which in turn has an impact on organizational
performance. Data from 404 Chinese and Pakistani companies involved in cross-border
supply chain operations is gathered for the study. Because the China-Pakistan Economic
Corridor (CPEC) has a positive effect on technology spillovers between organizations, there
is a high correlation between the samples from the two countries. The study concluded that

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environmental practices help improve firms' environmental performance and stimulate their
financial performance; higher eco-environmental performance significantly improves
organizational performance; and BCT significantly improves circular economy practises
(circular sourcing, circular design, recycling, and remanufacturing).

3.4 “Towards circular economy in the textiles and clothing value chain through
blockchain technology and IoT: A review”

The textile and clothing industry has a significant environmental impact due to the
increase in textile waste. This paper investigates blockchain technology, which is used to
register the activities of traceable items through the value chain, and reviews existing
approaches to traceability in the textile and apparel value chain.The Internet of Things (IoT)
and BCT are the perfect technologies to enable CE, as the CE model is based on the
sustainable reuse of materials and resources, which minimizes waste and conserves natural
resources. When combining IoT and BCT, there are certain difficulties. Using IoT edge
devices to gather and distribute readings about traceable items is one such challenge. These
readings typically produce a lot of data that rises at predetermined intervals. Using digital
twins to gather data about tradable goods presents another challenge. Information about
traceable items is entered into a traceability system via IoT identification tags.Due to its
decentralized nature and ability to function on a peer-to-peer network, where every
transaction can be verified without the need for authentication, BCT technology is utilized for
CE traceability and enforcement in the T&C value chain. Since most consensus nodes must
agree, it is nearly impossible to change the data that has already been registered in the
blockchain ledger, making the data unchangeable. Another benefit of BCT is transaction
transparency because recorded data is publicly accessible. Because of this transparency and
the timestamps that verify the chronological order of each data record, traceability is also
simple to audit. Blockchain technology (BCT) presents certain challenges, including energy
consumption and transaction costs. However, with careful technology selection and
configuration, blockchain can be used to support T&C value chain participants in a way that
respects and preserves the environment at a reasonable cost. Improved operational efficiency
is another benefit of integrating BCT and IoT into the CE of the T&C value chain. IoT
devices are not only more efficient than humans, but they also make fewer mistakes in
inventory management and offer real-time condition tracking and tracing in warehouses,
shipping containers, and other environments.

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4.0 Hypothesis Development

4.1 Blockchain technology and circular economy practices

Blockchain is an emerging technology with the capacity to transform both processes and
society as a whole (Swan, 2015). Nakamoto (2009) introduced the notion of blockchain as a
technological advancement that employs data mining methodologies to establish data
structures and encode information transactions. Transparency, traceability, credibility,
anonymity, mistrust, and decentralization are some of its defining characteristics (Lu, 2019).
BCT has the potential to facilitate CE practices and overcome various barriers to CE
transition, according to the literature (Wang et al., 2020). For example, various attributes of
BCT, including automation, dependability, and transparency, can facilitate CE strategies
effectively.

According to Rusinek et al. (2018), BCT additionally facilitates the provision of information
accessibility, which in turn improves collaboration among various members of the supply
chain and further enhances consumer comprehension. This collaboration has the potential to
significantly impact supply chain efficiency. BCT enhances the development of smart grids
by facilitating collaboration among various smart grid actors in the energy sector (Andoni et
al., 2019). Additionally, the literature contends that the transparency that BCT provides
guarantees the ongoing accessibility of data, which aids in the prevention of data tampering,
double spending, and fraudulent ownership (Khan et al., 2021). In particular, the prevention
of supply chain misconduct reduces expenses and increases productivity (Chen, 2018). In
light of these arguments, it can be deduced that the implementation of BCT offers a multitude
of substantial advantages that, as a result, are crucial in facilitating and bolstering the CE
model. Therefore, the present analysis suggests the subsequent relationships:

H1a. BCT has a positive and significant relationship with CP.

H1b. BCT has a positive and significant relationship with RR.

H1c. BCT has positive and significant relationship with CD

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4.2 Circular Economy practice and organizational performance

The term "CE" denotes the conversion of conventional manufacturing methods to a circular
framework that advocates for the reuse and recycling of materials (Khan et al., 2021). The
approach described is regenerative in nature and aims to regulate multiple energy and
production cycles in order to reduce resource wastage, energy leakages, and harmful
emissions (Geissdoerfer et al., 2017). Organizations can derive economic benefits from the
adoption of CE practices through the facilitation of effective waste management, resource
conservation, and financial resource utilization (Mangla et al., 2018). Environmental
degradation is primarily caused by conventional manufacturing methods (Bag & Pretorius,
2020). Therefore, by implementing environmentally beneficial and green practices such as
CE practices, organizations can effectively mitigate waste and harmful emissions, thereby
contributing to the attainment of sustainable performance (Konietzko et al., 2020). In a
similar fashion, CE practices assist organizations in utilizing energy and resources more
proficiently, leading to enhanced performance (Morais & Silvestre, 2018).

Additionally, empirical support for the significant correlation between green practices and
organizational performance has been provided by prior research. As an illustration, Qianli
and S. A. R. Khan (2017) documents a positive correlation between the economic value of
firms and the adoption of environmentally friendly practices. In a recent study, Khan et al.
(2021) also document that green practices have a substantial and favorable impact on the
sustainable performance of businesses. The presence of these conflicting findings has
underscored the need for comprehensive research concerning the impact of CE practices on
organizational performance. Therefore, the present analysis posits the subsequent
relationships:

H2a. CP has positive and significant relationship with ORP.

H2b. RR has positive and significant relationship with ORP.

H2c. CD has positive and significant relationship with ORP.

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5.0 Research Methodology

5.1 Research question

In Dawson (2019)’s view, a well-defined research methodology acts as the compass or

blueprint for the entire project, shaping the overall direction and dictating the specific tools
and softwares that will be used to delve into the chosen topic using the gathered data. For this
research paper, we are centering on the main question of how advanced technologies such as
blockchain technology (BCT) can potentially revolutionize the practice of circular economy
(CE) and its subsequent influence on organizational performance.

5.2 Conceptual Framework

Theoretically, circular economy (CE) practices are found to assist in achieving

sustainability goals, both directly and indirectly. Therefore, this study explores the main
common methods used by the Malaysian manufacturing companies to implement key CE
practices such as circular procurement, recycling/remanufacturing, and circular design and
their level of proficiency in blockchain technology (BCT). Looking at each variables’
relevance in this study, circular procurement refers to the practice of purchasing goods and
services in a way that supports the principles of a circular economy with intentions of
keeping materials and resources in use for as long as possible, minimizing waste and
pollution for a sustainable future. While recycling breaks down used materials for new
products, remanufacturing takes it a step further with its more advanced process involving
restoring old products to their original condition or even better than new with both being
crucial for maximizing used resources by keeping them in a closed loop. Circular design goes
beyond these, focused on creating products that minimizes waste and maximizes resource
reuse, it goes beyond simply recycling or remanufacturing existing products and delves into
the strategic planning and creation of products with their entire life cycle in mind. With the
usage of blockchain technology (BCT), it amplifies a secure, transparent and tamper-proof
record of product life cycles, from raw materials to its end product which guarantees all
stakeholders, from consumers to manufacturers of its responsible sourcing and ethical
practices. Figure 1 depicts a clearer understanding of the explained conceptual framework.

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 5.3 Research Design

To obtain the data needed, we used Google Form, an online software that allows its
users to create online forms and surveys with multiple question types, as our method to
distribute our questionnaire to our population which are employees from industries related to
our study namely the chemical and manufacturer industry, plastic and rubber industry,
electronics industry, metal and paper product industries as well as textile and clothing
industry within the Malaysian country. This mode of data collection is chosen because it is
more convenient to distribute to our population whose companies are located in different
areas and more accessible for our team to view at all times to check the current number of
respondents as well as to analyze data submitted. The Google Form was open for responses
for 4 weeks, the whole month of November and sent via Email. Albeit getting 43 responses,
we have carefully filtered through the answers and decided to select 30 respondents with
complete and reliable answers.

5.4 Data Collection

To complete this research paper, we are utilizing mixed-methods research, or also

called multimethodology, which uses both quantitative and qualitative methods in a single
study (Tashakkori & Teddlie, 1998). With the help of qualitative secondary data obtained
from reliable sources on the internet, we have chosen several relevant academic writings with
the purpose of guiding our literature review along with other theorized parts. We selected the
chosen journals and articles through identifying and matching the keywords of this research
paper, thus ensuring our secondary data consists of relevant topics to support our findings.

Other than that, quantitative data which are extracted from our responses on the
Google Form is also utilized to have deeper, more analytical findings. This is labeled as
primary data as it is the original data we derived from our own questionnaire and this is
important to verify the credibility of our findings as our survey questions are specifically
catered according to our research question and hypothesis to ensure potential biases or
misalignment of existing data is avoided.

This study investigates how digital technology and practice of circular economy (CE)
correlates with the standard of organizational performance through a five-sections
questionnaire survey. For the initial section called section A, it mainly delved into our
respondent’s demographic and socio-economic statuses for us to gain better insight from

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which industries are our data obtained from such as job title as well as length of experience
(Table 2). In the following section, section B, we asked respondents on their knowledge as
well as expertise in the blockchain technology sphere through a 5-point likert scale, with
1-point being strongly disagree and 5-point representing strongly agree. Next, section C
focuses on their perception towards circular economy (CE) practices through relevant
statements using a 5-point likert scale. Meanwhile, section D inquires the respondents to
evaluate their own companies’ performance across four key dimensions namely financial
health, operational efficiency, innovative prowess, and commitment to sustainability through
a 5-point likert scale as well. The last section wrapped up the questionnaire with an
open-ended question to gain personal ideas and insights on how utilizing both blockchain
technology (BCT) and circular economy (CE) practices can act as catalysts for improving
organizational performance.

5.5 Data Analysis

To leverage the full potential of our quantitative data, we chose EViews, a powerful
econometric software, for a more advanced analysis. EViews is a modern econometric,
statistics, and forecasting package that offers powerful analytical tools within a flexible,
easy-to-use interface. With advantage points such as being equipped with a vast library of
econometric models and complex statistical tests as well as being able to uncover hidden
relationships and patterns through econometric models like regressions and time series, it
offers unparalleled precision in understanding our data.

After transferring our dataset from the questionnaire into the EViews software, we
generated a regression model based on our hypotheses stated earlier on in this paper which
basically explores the relationships between variables. The model explains how any changes
in the independent variables (predictors) will influence a dependent variable (outcome).
Moving on, a hypothesis testing will be done where it reveals the coefficients, t-statistics,
p-values. This is a crucial tool used to analyze our data as it provides evidence for or against
our stated hypothesis. Furthermore, the values of f-squared, r-squared and adjusted r-squared
are also exported to indicate whether the entire model is statistically significant or otherwise.
We also use descriptive analysis which produces graphical representation of data through
charts, graphs, and tables, further aiding in visualizing and interpreting the information.

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 Therefore, we believe that EViews is the best econometric software for us to use to
further delve into the interpretations of our raw quantitative data. By utilizing EViews, we are
able to quickly and efficiently manage the collected data, perform econometric and statistical
analysis, and generate forecasts or model simulations. Besides, this software is easily
accessible and its instruction to use is available on the website.

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6.0 Results and Findings

This section analyzes the data acquired from the questionnaire that was answered by
the respondents. The first part shows the raw data obtained in the form of descriptive analysis
like tables, pie charts and bar charts for easier illustration and understanding. On the other
hand, the second part delves into a more rigorous analysis by employing econometric
techniques. This is done through running a regression model through EViews, a statistical
software and correlating the variables concerned with the scope of our study such as shown in
Figure 1 below.

Figure 1: Conceptual Framework

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6.2 Descriptive Analysis of Demographics

Characteristics N %

Job Title

Vice President 4 13.3

General Manager 7 23.3

Procurement Manager 3 10

Operation Manager 7 23.3

Logistics Manager 4 13.3

Information System Manager 5 16.7

Job Experience

Less than 5 11 36.7

5 to 10 9 30

10 to 15 3 10

15 to 20 5 16.7

Over 20 years 2 6.7

Industry

Chemical Manufacturer 5 16.7

Metal Product Manufacturer 3 10

Electronic Products 11 36.7

Paper Manufacturer 6 20

Textile and Clothing 4 13.3

Plastic and Rubber Manufacturer 1 3.3

Table 1: Descriptive Analysis of Demographic Profile

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 Figure 2: Pie charts of the Demographic Profile

Table 1 above illustrates the demographic’s work characteristics, namely their job
title, length of work experience and the industry they are currently affiliated with. The
majority of respondents are general managers and operation managers with an equal
percentage of 23.3%, followed by information system managers with 16.7%. Next, there is an
equal percentage of respondents who are logistics managers and vice presidents (13.3% each)
and a smallest percentage of procurement managers (10%). Regarding their working

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experience, most respondents fell within the less than 5 years range (36.7%) followed by the
5 to 10 years range (30%). The third most range is from 16 to 20 years, while the smaller
proportions belonged to the 11 to 15 years (10%) and lastly, more than 20 years (6.7%) age
bracket (11.1%). A significant portion are from the electronic products industry (36.7%)
preceded by 20% from the paper manufacturer industry and the chemical and manufacturer
industry (16.7%). Textile and clothing industry records 13.3% while, plastic and rubber
industry has 3.3%.

6.3 Descriptive Analysis of Blockchain Technology (BCT)

6.3.1 Transparency and Information Sharing

Table 2: Descriptive Analysis of Transparency and Information Sharing

Blockchain technology enhances transparency and information sharing in the supply chain

Item Frequency Percentage(%)

Strongly Disagree 1 3.3

Disagree 1 3.3

Neutral 8 26.7

Agree 16 53.3

Strongly Agree 4 13.3

(Source: Questionnaire)

Figure 3: Bar Chart of Transparency and Information Sharing

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 Based on Table 2 that depicts respondent’s opinion if blockchain technology enhances
transparency and information sharing in the supply chain. We could see that most agree with
the statement (53.5%), while 26.7% feel neutral about it. 13.3% strongly agree along with an
equal percentage of 3.3% respondents who disagree and strongly disagree with the statement.

6.3.2 Traceability

Table 3: Descriptive Analysis of Traceability

Blockchain technology improves traceability throughout the entire product life cycle

Item Frequency Percentage(%)

Strongly Disagree 2 6.7

Disagree 0 0

Neutral 4 13.3

Agree 14 46.7

Strongly Agree 10 33.3

(Source: Questionnaire)

Figure 4: Bar Chart of Traceability

Table 3 illustrates a high 46.7% of respondents who agree that blockchain technology
(BCT) has the ability to improve traceability throughout the entire product life cycle,
accompanied by a strong agreement (33.3%), then 13.3% neutral-feeling. Oppositely, 6.7%
strongly disagree with the statement about traceability of BCT.

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 6.3.3 Data Security

Table 4: Descriptive Analysis of Data Security

Blockchain technology enhances data security and protects confidential information

Item Frequency Percentage(%)

Strongly Disagree 3 10

Disagree 0 0

Neutral 5 16.7

Agree 14 46.7

Strongly Agree 8 26.7

(Source: Questionnaire)

Figure 5: Bar Chart of Data Security

According to Table 4, 10% of respondents strongly disagree that blockchain

technology (BCT) can enhance data security and protect confidential information with 16.7%
of them feeling neutral. However, 26.7% and 46.7% of them agree and strongly agrees
respectively opiniated.

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 6.3.4 Recycling and Remanufacturing

Table 5: Descriptive Analysis of Recycling and Remanufacturing

Blockchain technology supports recycling and remanufacturing initiatives in the organization

Item Frequency Percentage(%)

Strongly Disagree 1 3.3

Disagree 1 3.3

Neutral 6 20

Agree 13 43.3

Strongly Agree 9 30

(Source: Questionnaire)

Figure 6: Bar Chart of Recycling and Remanufacturing

With the main topic of sustainability, most respondents (43.4%) agree that blockchain
technology (BCT) supports recycling and remanufacturing initiatives in their respective
organizations. This is followed by 30% who strongly agree and 20% with an unbiased view.
Table 5 also shows that there are 3.3% each for respondents who disagree and strongly
disagree on the relationship between recycling, remanufacturing and blockchain.

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 6.3.5 Positive Impact on CE

Table 6: Descriptive Analysis of Positive Impact on CE

Blockchain technology has positive impact on the circular economy practices in your organization

Item Frequency Percentage(%)

Strongly Disagree 3 10

Disagree 0 0

Neutral 3 10

Agree 16 53.3

Strongly Agree 8 26.7

(Source: Questionnaire)

Figure 7: Bar Chart of Positive Impact on CE

According to Table 6, respondents are inquired on their opinion towards blockchain

technology’s positive impact on the circular economy practices in their organisation and a
high 53.5% agrees with this statement along with 26.7% having strong agreement. 10% feel
indifferent about it while another 10% have experienced situations where blockchain
technology (BCT) had negative effects on the circular economy in their own organization.

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6.4 Descriptive Analysis of Circular Economy (CE) Practices

6.4.1 Recycling and Remanufacturing

Table 7: Descriptive Analysis of Recycling and Remanufacturing towards CE

Perception of recycling and remanufacturing towards circular economy (CE)

Item Strongly Disagree Neutral Agree Strongly

Disagree Agree

Direct Recycling 0 1 4 14 11

Downcycling 0 2 10 11 7

Remanufacturing 0 1 5 12 12

(Source: Questionnaire)

Figure 8: Grouped Bar Chart of Recycling and Remanufacturing towards CE

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 From Table 7, we can analyze their perception of recycling and remanufacturing
towards circular economy (CE) whereby for direct recycling, 14 and 11 respondents agree
and strongly agree, respectively. While four people feel neutral and one disagrees about direct
recycling. For downcycling, there is not much gap between agree and neutral opinions with
agree being 11 and neutral being 10. Seven respondents strongly agree and conversely, there
is disagreement coming from a duo. In terms of remanufacturing, the highest shares of equal
numbers of 12 people agree and strongly agree, meanwhile, five feel unbiased and one person
objects that remanufacturing can contribute to a circular economy.

6.4.2 Circular Purchasing

Table 8: Descriptive Analysis of Circular Purchasing towards Circular Economy (CE)

Perception of circular purchasing towards circular economy (CE)

Item Strongly Disagree Neutral Agree Strongly

Disagree Agree

Closed-loop purchasing 1 2 7 13 7

Waste-to-value purchasing 0 1 11 11 7

Shared-use purchasing 0 0 9 12 9

(Source: Questionnaire)

Figure 9: Grouped Bar Chart of Circular Purchasing towards CE

Table 8 shows the analysis of respondent’s view on circular purchasing (CP) towards
circular economy (CE). For closed-loop purchasing, 13 respondents agree and second highest
shared by strongly agree and neutral opinionated people, 7 each while one person disagrees
about this type of circular purchasing. For waste-to-value purchasing, there is no gap between
agree and neutral opinions with both recording 11 respondents. Seven of them strongly agree
and conversely, a person disagrees with the statement. In terms of shared-use purchasing, the
highest shares account for 12 people while strongly agree and neutral opinionated people
share the same number of 9 respondents each.

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 6.4.3 Circular Design

Table 9: Descriptive Analysis of Circular Design towards Circular Economy (CE)

Perception of circular design towards circular economy (CE)

Item Strongly Disagree Neutral Agree Strongly

Disagree Agree

Designing for durability 0 1 8 11 10

Designing for disassembly 0 1 8 16 5

Designing for materials flow 0 2 10 12 6

(Source: Questionnaire)

Figure 10: Grouped Bar Chart of Circular Design towards CE

The perception of circular design towards circular economy (CE) for designing for
durability shows that eight respondents have impassive opinions on it, while 11 agrees that
durable designs can contribute towards a circular economy. One third strongly agrees with
this motion while one person disagrees. Regarding designing for disassembly, it records a
high 16 for agree-opinionated people. Others chose neutral (8), strongly agree (5) and
disagree (1). In terms of designing for material flow, 2 people disagree with its benefits to
circular economy while 10 have a neutral view on it. 12 respondents agree followed by 6 who
strongly agree with this perception according to Table 9.

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 6.4.4 Organizational Performance

Table 10: Descriptive Analysis of Organizational Performance towards Circular Economy

Perception of organizational performance towards circular economy (CE)

Item Strongly Disagree Neutral Agree Strongly

Disagree Agree

Financial performance 0 1 8 14 7

Operational performance 0 1 9 16 4

Innovation performance 0 2 6 13 9

Sustainability performance 2 1 8 16 3

(Source: Questionnaire)

Figure 11: Grouped Bar Chart of Organizational Performance towards CE

Table 10 illustrates people’s perception of organizational performance impact towards

circular economy (CE). We have divided into 4 categories, the first which looks into the
monetary side where 14 and 7 people agree and strongly agree that their organization’s
financial performance is affected by circular economy (CE). 8 people are unbiased while a
person thinks there is no correlation between their company’s financial standing and the
circular economy. Looking from the operational angle, most respondents agree (16) that their
operational performance is affected by the circular economy. With 4 people strongly agreeing
while 9 feels neutral and one person disagreeing with the statement. From the innovation
side, 13 people agree and 9 strongly agree that the innovation stems from a circular economy.
6 people are indecisive on their opinion while a pair disagrees. For sustainability

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performance, 16 people agree that there is an impact while 8 neither agree nor disagree. Table
12 also notes one person disagrees along with two strong disagreements.

6.5 Descriptive Analysis of Organizational Performance

6.5.1 Organization’s Overall Performance

Table 11: Descriptive Analysis of Organization's Overall Performance

Comparison of organization's overall performance to the industry average

Item Frequency Percentage(%)

Strongly Disagree 0 0

Disagree 0 0

Neutral 7 23.3

Agree 18 60

Strongly Agree 5 16.7

(Source: Questionnaire)

Figure 12: Bar Chart of Organizational Overall Performance

According to Table 11, after asking respondents to rate their organization’s overall
performance against industry average, we obtained statistics of 60% of them agreeing that
their companies are doing better than their competitor’s performance. 23.3% of them feel

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they are on par with the others and 16.7% strongly agree with the motion of them having
great overall performance.

6.5.2 Organization’s Financial Performance

Table 12: Descriptive Analysis of Organization's Financial Performance

Comparison of organization's financial performance to the industry average

Item Frequency Percentage(%)

Strongly Disagree 0 0

Disagree 1 3.3

Neutral 5 16.7

Agree 14 46.7

Strongly Agree 10 33.3

(Source: Questionnaire)

Figure 13: Bar Chart of Organization’s Financial Performance

Table 12 states the people’s rating of the financial performance of their companies as
compared to the industry’s average. A substantial amount of 46.7% agrees with 33.3% strong
agreements that they are doing good profit-wise. 16.7% think their organisation is subpar in
handling money in a circular economy and 3.3% oppose the motion.

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 6.5.3 Organization’s Environmental Performance

Table 13: Descriptive Analysis of Organization's Environmental Performance

Comparison of organization's environmental performance to the industry average

Item Frequency Percentage(%)

Strongly Disagree 0 0

Disagree 1 3.3

Neutral 5 16.7

Agree 14 46.7

Strongly Agree 10 33.3

(Source: Questionnaire)

Figure 14: Bar Chart of Organization’s Environmental Performance

Table 13 looks at respondent’s ratings of their organization’s environmental

performance in comparison with the industry average. It records that 46.7% agrees and 20%
strongly agrees that with a circular economy, their companies are more environmentally
aware of the impacts they caused. Meanwhile, 26.7% does not have any opinions on this
matter while 6.7% believes that by employing circular economy practices, it will not make
the company perform better environmentally, than the industry average

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6.6 Regression Results

This research aims to replicate and build upon the previous studies by exploring our
first hypothesis, how the features of blockchain technology such as helping in the contexts of
sharing, data storage, data manage- ment, data analytics, and smart contracts can influence
the circular economy practices. Besides, we also look at the impacts of circular economy
(CE) practices namely circular purchasing, recycling and remanufacturing and circular design
has on the organisational performance (OP). Thus, by combining both variables, we get our
primary focus, which is the analysis is to understand the degree to which the independent
variables blockchain technology (BCT) and circular economy (CE) practices are able to
manipulate the organisational performance (dependent variable). This can be shown in a
mathematical way through the creation of a regression model.

5.6.1 Hypothesis testing

Ho: There is no relationship between Blockchain Technology (BCT) and Circular Design
(CD)
H1: There is a relationship between Blockchain Technology (BCT) and Circular Design (CD)

Based on the Eviews output generated using the OLS method, the p-value (0.0000) is
lower than 0.05. Hence, we reject the null hypothesis. Therefore, there is a relationship
between BCT and CD.

30
Ho: There is no relationship between Blockchain Technology (BCT) and Recycling
Remanufacturing (RR)
H1: There is a relationship between Blockchain Technology (BCT) and Recycling
Remanufacturing (RR)

Based on the Eviews output generated using the OLS method, the p-value (0.0000) is
lower than 0.05. Hence, we reject the null hypothesis. Therefore, there is a relationship
between BCT and RR.

31
Ho: There is no relationship between Blockchain Technology (BCT) and Circular
Procurement (CP)
H1: There is a relationship between Blockchain Technology (BCT) and Circular
Procurement (CP)

Based on the Eviews output generated using the OLS method, the p-value (0.0000) is
lower than 0.05. Hence, we reject the null hypothesis. Therefore, there is a relationship
between BCT and CP

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Ho: There is no relationship between Circular Procurement (CP) and Organizational
Performance (OP)
H1: There is a relationship between Circular Procurement (CP) and Organizational
Performance (OP)

Based on the Eviews output generated using the OLS method, the p-value (0.0000) is
lower than 0.05. Hence, we reject the null hypothesis. Therefore, there is a relationship
between CP and ORP.

33
Ho: There is no relationship between Recycling Remanufacturing (RR) and Organizational
Performance (OP).
H1: There is a relationship between Recycling Remanufacturing (RR) and Organizational
Performance (OP).

Based on the Eviews output generated using the OLS method, the p-value (0.0000) is
lower than 0.05. Hence, we reject the null hypothesis. Therefore, there is a relationship
between RR and ORP.

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Ho: There is no relationship between Circular Design (CD) and Organizational Performance
(OP).
H1: There is a relationship between Circular Design (CD) and Organizational Performance
(OP).

Based on the Eviews output generated using the OLS method, the p-value (0.0000) is
lower than 0.05. Hence, we reject the null hypothesis. Therefore, there is a relationship
between CD and ORP.

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5.6.2 F-test

From the F-test, we can extract the F-statistics value which is 228.1178 and a
significance level of 0.05, we get 228.1178 > 0.05 whereby we reject the null hypothesis.
To conclude, there is enough evidence to conclude that there is an overall statistically
significant regression model.

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5.6.3 R-squared and Adjusted R-squared

The model fit statistics reveal an R-squared value of 0.97333 signifying that approximately
97.33% of the variation in Orp is explained by CP,CD,RR and BCT. The adjusted
R-squared, accounting for the number of variables, is 0.97333, indicating that it is a very
strong fit of the regression model of the data. The independent variables included in the
model explain a significant portion of the variability in the dependent variable.

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7.0 Conclusion and Policy Recommendation

The impact of BCT on the implementation of CE practices to enhance firm

performance is investigated in this study. 30 managers from three manufacturing companies
in Malaysia were asked to fill out a form in order to get quantitative data. E-views software
was used to use the Structural Equation Modeling method to look at data and test hypotheses
about BCT, CE practices, and the success of the organization.
The measurement model data show that the constructs are reliable and valid.
Similarly, the model also meets other criteria, such as the fact that the terms are predictively
relevant and there is no method bias. From the structural model, we can see that BCT has a
strong positive impact on CE practices. It was found that BCT has a strong relationship to all
four aspects of circular economy practices: circular procurement, circular design, recycling,
and remanufacturing. Next, it has been found that these CE practices (like recycling,
remanufacturing, and circular design) have a big and good effect on how well an organization
does its job. This supports the idea that BCT could be very important in making CE projects
possible, which would further improve the performance of the organization.
The study's results have a number of policy consequences for the government and for
organizations. First, this study's main point is that using BCT could make CE practices and
projects stronger to enable them to last more effectively. In particular, BCT makes it easier to
do things like recycling, circular design, and circular buying, all of which are important for
long-term performance. BCT supports CE policies by offering safety, promoting openness,
and improving traceability throughout the whole life cycle of a product. This would make the
whole supply chain method much better, which would improve the performance of the
organization.
Similarly, this study suggests that organizations might be able to make better use of
their resources if they implement BCT. In addition, blockchain-based CE practices help reach
a number of sustainability goals, such as making materials more useful again and better
managing waste. So, in the long run, putting in place a CE system could improve the success
of organizations by helping them reach their economic and environmental goals because of
this, authorities and organizations are highly encouraged to support BCT when putting the CE
system into place so that it lasts.
The current investigation is limited by the following; The present study's findings are
limited in scope to Malaysian manufacturing firms. It is advisable to conduct further
experiments in other economies in order to generate more reliable results that will contribute

38
to the existing corpus of literature. Furthermore, this research suggests that practitioners
examine the impact of blockchain and other digital technologies on global supply chain
management (GSCM) in order to gain a comprehensive understanding of how these
technologies contribute to the achievement of sustainability objectives and the fulfillment of
worldwide demands. Fourth, the data utilized in this study were cross-sectional; for more
reliable results, longitudinal research is advised.

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8.0 References

Syed Abdul Rehman Khan, Zhang Yu, Salman Sarwat, Danish Iqbal Godil, Sumeela Amin &
Sobia Shujaat (2022) The role of block chain technology in circular economy practices to
improve organizational performance, International Journal of Logistics Research and
Applications, 25:4-5, 605-622, DOI: 10.1080/13675567.2021.1872512

Kumar, N.M.; Chopra, S.S. Leveraging Blockchain and Smart Contract Technologies to
Overcome Circular Economy Implementation Challenges. Sustainability 2022, 14, 9492.
https://doi.org/10.3390/su14159492

Khan, Syed & Razzaq, Asif & Yu, Zhang & Miller, Sharon. (2021). Industry 4.0 and circular
economy practices: A new era business strategies for environmental sustainability. Business
Strategy and the Environment. 10.1002/bse.2853.

Alves L, Ferreira Cruz E, Lopes SI, Faria PM, Rosado da Cruz AM. Towards circular
economy in the textiles and clothing value chain through blockchain technology and IoT: A
review. Waste Management & Research. 2022;40(1):3-23. doi:10.1177/0734242X211052858

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