CSR and sustainable performance in Indonesian recycling firms: The mediating role of company ability in the circular economy era

Lestari, Yona Octiani ORCID: https://orcid.org/0000-0002-1825-0097, Sidharta, Eka Ananta, Rusdiyanto, Rusdiyanto, Romadhon, Fitri and Damastuti, Erlina (2026) CSR and sustainable performance in Indonesian recycling firms: The mediating role of company ability in the circular economy era. Journal of Asian Scientific Research (JASR), 16 (4). pp. 287-308. ISSN 2223-1331

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Abstract

This study sought to investigate the role of corporate social responsibility (CSR) in sustainable performance with company ability as a mediating variable among recycling companies in Indonesia during the era of the circular economy. This quantitative study was conducted on recycling industries that use the waste bank system to process plastic, paper, textiles, and wood materials into furniture, organic fertilizers, and handicrafts. Of the 241 questionnaires sent to commercial recyclers in Indonesia, 151 were completed and returned with valid answers. SmartPLS was used for PLS-SEM to perform confirmatory factor analysis, correlation and multicollinearity tests, reliability analysis, predictive relevance (Q²), common method bias testing, and bootstrapped structural path coefficients. The findings reveal that the company's ability significantly drove the mediated link between CSR and sustainable performance. CSR affects sustainable performance (β = 0.387; p < 0.01***) and is indirectly affected by company ability (indirect β = 0.425; p < 0.01***). The model explains 80.5% of the variance in sustainable performance. These findings highlight the need for a long-term approach that prioritizes sustainability over short-term costs, especially in developing economies facing the global climate crisis. This study provides a seldom-seen integrated perspective on recycling in Indonesia. It shows that company competence is key to sustainable value creation, while supporting the ESG and circular economy agendas as drivers of green growth

Item Type:	Journal Article
Keywords:	company’s ability; csr; sem-pls; smartpls; sustainable performance
Subjects:	14 ECONOMICS > 1402 Applied Economics > 140207 Financial Economics
Divisions:	Faculty of Economics > Department of Accounting
Depositing User:	SE.,MSA yonaoctiani lestari
Date Deposited:	14 Oct 2026 11:38

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