Driving sustainable business performance: The roles of circular economy policy, stakeholder pressure, and green culture

The aim of this study is to examine how circular economy policy (CEP) and stakeholder pressure (SP) influence sustainable business performance (SBP), with green business innovation (GBI) and top management commitment (TMC) acting as mediators and green culture (GC) as a moderator. Drawing on the Resource-Based View, Institutional Theory, and the Attention-Based View, the study proposes and tests an integrated research framework using survey data from 468 firms in Vietnam, an emerging economy facing increasing environmental and regulatory pressures. Partial least squares structural equation modeling (PLS-SEM) was used to analyze the data. The findings show that CEP and SP both have positive effects on GBI and TMC, indicating that regulatory and stakeholder forces jointly encourage sustainability-related strategies. GBI also positively influences TMC, suggesting that engagement in green innovation strengthens managers’ commitment over time. TMC has the strongest direct effect on SBP and plays a key role in linking external pressures and innovation activities to sustainable performance outcomes. In addition, green culture strengthens the effects of CEP and SP on GBI but does not significantly moderate their effects on TMC, implying that top management commitment is more responsive to external pressures than to organizational culture. Overall, the study contributes to the sustainability management literature and provides practical implications for policymakers and managers seeking to enhance long-term sustainable business performance.