Factors affecting the circular economy in Vietnam

Pham Tien Dat; Nga Phan Thi Hang; Hang Le Thi Thuy Article Factors affecting the circular economy in Vietnam Contemporary Economics Provided in Cooperation with: VIZJA University, Warsaw Suggested Citation: Pham Tien Dat; Nga Phan Thi Hang; Hang Le Thi Thuy (2025) : Factors affecting the circular economy in Vietnam, Contemporary Economics, ISSN 2300-8814, VIZJA University, Warsaw, Vol. 19, Iss. 2, pp. 132-147, https://doi.org/10.5709/ce.1897-9254.558 This Version is available at: https://hdl.handle.net/10419/323487 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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Environmental pollution and resource depletion are increasingly adversely affecting human life, requiring many countries to actively build and develop a circular economy, including Vietnam. Besides, Vietnam participates in many new-generation free trade agreements and commitments to safety standards and the ecological environment. Applying the circular economy is an inevitable trend toward sustainable development. Building a circular economy model has a close relationship with factors such as: Reduce, Reuse, Recycle, Rethink, and Refuse. They have played an essential and groundbreaking role in shaping closed-loop systems. Therefore, the article aimed to discover critical factors affecting the circular economy and proposed policy recommendations. The authors applied qualitative and quantitative methods to process data through SPSS 20.0. The authors surveyed 450 leaders and other people working for 30 provinces in Vietnam. Based on structural equation modeling, the authors tested the overall fit of the data. The main findings explored the Reduce (Red) factor as the most substantial impact of the five factors affecting the circular economy, with a significance of 1.0 percent. Based on the research, the authors proposed the policy recommendations such as a clear legal corridor for the formation and development of the circular economy, mechanisms and policies for developing advanced technology, reuse, and recycling of waste. The article's novelty has analyzed the policies that Vietnam is trying to develop economically sustainably, minimizing adverse impacts on the environment, and the circular economy is a model of interest and development orientation. 1. Introduction1. Introduction Over the years, the circular economy has been implemented in many fields, bringing socioeconomic and environmental benefits and associated with sustainable development worldwide (Lahti et al., 2018; Ormazabal et al., 2018). The critical purpose of a circular economy is to optimize resource use by circulating products, components, and materials that are used at their highest utility in both the engineering and biological cycles, through those products or materials in the eco-economy will be continuously maintained, reused, and recycled to no longer exploit resources or create waste. This has become one of the critical components of carbon reduction plans in many countries. The circular economy also aims to decouple economic growth from resource use through the reduction and circularization of natural resources, achieving both goals, responding to resource depletion and reducing resource use inputs and environmental pollution in development at the output (Accorsi et al., 2015; Smol et al., 2017). Factors Affecting the Circular Economy in Vietnam ABSTRACT F63, O10, Q01. KEY WORDS: JEL Classification: circular, economy, sustainable, development, policy. University of Finance - Marketing (UFM), Ho Chi Minh City, Vietnam Correspondence concerning this article should be addressed to: Le Thi Thuy Hang, University of Finance - Marketing (UFM), Ho Chi Minh City, Vietnam E-mail: [email protected] Pham Tien Dat , Nga Phan Thi Hang , and Le Thi Thuy Hang3 Primary submission: 10.03.2024 | Final acceptance: 09.05.2024 133 Pham Tien Dat, Nga Phan Thi Hang, Le Thi Thuy Hang 10.5709/ce.1897-9254.558DOI: CONTEMPORARY ECONOMICS Vol. 19 Issue 2 132-1472025 The benefits of the circular economy in the socioeconomic and environment are all towards sustainable development. The circular economy offers a high potential for economic growth and more jobs. Through the economical use of resources, businesses can produce at a low cost by providing products and services with multiple benefits (Dong et al., 2016; Kirchherr et al., 2017; Meyer et al., 2017). The circular economy model can save more raw materials than the linear method extraction of standard raw materials. While the demand for raw materials will increase due to the increase in world population and consumer demand, the activities in the circular economy use fewer raw materials by focusing on prolonging the life cycle of the materials. The Ministry of Natural Resources and Environment recently said that shifting from a linear economy to a circular economy is becoming a global trend. In the current context, transitioning from a straight to a circular economy is essential for all countries worldwide, notwithstanding Vietnam. The four main reasons that this transition is required include (a) The increase in demand for raw materials, while this resource is increasingly depleted, especially for mineral resources, which are non-renewable resources; (b) Dependence on other countries, especially countries dependent on other countries for raw materials. This dependence leads to global political tension; (c) Impacts on climate change (emissions of greenhouse gases, especially CO2) increase the process of extreme climate change, causing severe consequences. The transition to a circular economy with the goal of sustainable energy use will reduce climate change; (d) Create economic opportunities, especially for business and science in innovation, design, recycling, and creativity. Solving problems related to the scarcity of raw materials, using sustainable energy, minimizing waste in each stage of the product life cycle, reusing available materials, etc., significant investment in qualified scientific human resources, increasing the economy's competitiveness. The role of the circular economy is to encourage companies to introduce disruptive technologies and new circular economy models. The development of Industry 4.0 has promoted as well as some limitations to the implementation of the circular economy model. Technology contributes significantly to the circular economy model's success because waste reuse and recycling require advanced and modern technology. In addition, regulations and policies for sustainable development and sustainability goals, requirements, and requirements will significantly affect the ability to deploy the Circular Economy. The transformation to a green, circular business model will help businesses meet the market's and consumers' requirements in the current period. In addition, the circular economy is an inevitable trend in the world, including Vietnam. The world faces many challenges and difficulties when the global living environment is threatened. Each country must be responsible for devising solutions to solve the problem of saving fuel, ensuring production and business activities, creating high economic value, and protecting the environment. Vietnam has initially implemented the circular economy model well and achieved specific results. However, Vietnam has not yet completed regulations on this new circular economy model, and there has been no official survey on factors affecting the circular economy. Therefore, perfecting the law and exploring the factors are essential for the circular economy to develop systematically, become more robust, and become safer. This is a new point compared to other domestic and international studies and is also the basis for policy researchers to refer to in formulating policies. Thus, the article aims to explore critical factors affecting the circular economy and give policy recommendations for improving the circular economy. The paper is structured as follows: part 1 reviews the literature and presents the theoretical framework of this research; part 2 describes the database used and the methodology applied; part 3 offers and discusses the analysis results; and the article ends with some final conclusions. 2. Literature Empirical Review 2. Literature Empirical Review 2.1. The Circular Economy The circular economy and the business models belong to different sectors (manufacturing, services, or high knowledge-intensive sectors). For example, www.ce.vizja.pl 134 Factors Affecting the Circular Economy in Vietnam This work is licensed under a Creative Commons Attribution 4.0 International License. the biotechnology industry is an innovative and highly knowledge-intensive industry that shows that the business innovation process results from striving for market competitiveness, not achieving sustainable development. Thus, financial issues are as important as environmental issues in the circular economy. There are similarities and differences between circular economy models in different industries. Traditional business models can also be transformed into circular economy models by incorporating circular strategies into various sectors. At the product level, assessing product value, circularity, and economic potential if the circular economy model is applied and evaluating the product and service system for the supply chain's circularity shows the relationship between the circular economic model and the product. Therefore, different product types with their own characteristics and extended product life cycles will affect the selection and application of the appropriate circular economy model for businesses. The circular economy is becoming a trend in countries, significantly when the world's resources are increasingly depleted, helping to solve the problem between economic benefits and environmental protection. A circular economy is an industrial system that restores or regenerates by intent and design. It transitions to renewable energy, eliminating hazardous chemicals and waste that degrades reusability through the superior design of materials, products, systems, and scope. These are business models. Or, to put it simply, a Circular economy is turning the waste output of one industry into an input resource of another sector or circulating within an enterprise itself. The circular economy partly contributes to adding value to businesses, reducing resource exploitation, waste treatment costs, and minimizing environmental pollution. In the context of modern society's development, high consumption causes many factors that negatively impact human health and ecosystems, bringing many dangers to the environment and sustainable development. There have been many interpretations of the circular economy (Geissdoerfer et al., 2017; Schroeder et al., 2019; Tseng et al., 2018; Zink & Geyer, 2017). Zink and Geyer (2017) showed that the circular economy is an industrial system restored or recreated according to intent and design. It transitions to renewable energy, eliminates hazardous chemicals that cause reuse, and returns to the biosphere through the superior design of materials, products, systems, and tissues business model. Ünal et al. (2019) defined the circular economy as transcending the current extractive industrial model, focusing on positive societal benefits. It entails economic activity gradually separating from the consumption of finite resources and limiting waste generation, and at the same time converting to renewable energy sources (Korhonen et al., 2018; Govindan and Hasanagic, 2018; Ghisellini et al., 2016). 5R Model: Developed based on the 3R model with the addition of 2Rs Rethink and Recover. 2.2. Reduce (Red) Reduce unnecessary things you are still using, such as resources, energy consumption, and waste (Geissdoerfer et al., 2017; 2018). Previous literature maintains that the consumption habits of people, communities, and society need to be changed to reduce excessive consumption leading to the consumption and depletion of natural resources. To promote this goal, many communities and countries have applied the sharing economy model with high efficiency (the model of sharing appliances, household appliances, sharing means of transport, etc.), sharing logistics infrastructure in transportation and storage of goods...). Thus, the authors proposed H1 below: H1: Reduce is significantly affecting the circular economy in Vietnam. 2.3. Reuse (Reu) Reuse is to reuse anything used repeatedly to prolong the life of the items for the same purpose or for another purpose before replacing them (Gardas et al., 2019; Geissdoerfer et al., 2017). Reuse is an activity; consumer habits need to be changed to continue using products and goods many times and can be used for many different purposes instead of just using one and then throwing it away. However, for effective reuse, the products and goods must have quality and features to be reused (Geissdoerfer et al., 2018). In addition, to enhance reuse activities, 135 Pham Tien Dat, Nga Phan Thi Hang, Le Thi Thuy Hang 10.5709/ce.1897-9254.558DOI: CONTEMPORARY ECONOMICS Vol. 19 Issue 2 132-1472025 enterprises and manufacturers must ensure the formation and provision of warranty, maintenance, component replacement, repair services, etc., to prolong the service life. Thus, the authors proposed H2 below: H2: Reuse is significantly affecting the circular economy in Vietnam. 2.4. Recycle (Rec) Recycle: Recycle discarded items and unnecessary items into useful ones, and convert waste into resources and energy by applying new technology & techniques (Geissdoerfer et al., 2017). Recycling is a resource recovery activity that includes collecting, classifying, and treating discarded products after use and waste to recover all resources and process them into recycled materials. These recycled materials will be returned to the next production cycle at an appropriate rate to meet product quality requirements or produce new products according to society's customer needs (Beitzen-Heineke et al., 2017). According to the general trend of the world, in manufacturing goods, businesses need to be responsible for recovering, reusing, recycling, and disposing of their products after use. Thus, right from the design stage, the selection of production materials, packaging materials, etc., the manufacturer had to calculate and choose the most optimal solution to solve all the problems in terms of production costs, costs of recovery, reuse, recycling, and disposal for the entire product life cycle. Thus, the authors proposed H3 below: H3: Recycling is significantly affecting the circular economy in Vietnam. 2.5. Rethink (Ret) Rethink: Change your mind/rethink about maintaining the ecosystem. Weigh your options, consider their environmental impact, and review all other Rs holistically and holistically (BeitzenHeineke et al., 2017; Esposito et al., 2017; Geissdoerfer et al., 2017). Rethink and Redesign: Requires all manufacturers to change their thinking and approach when deciding and producing any new commodity products in terms of responsibility for recovery, reuse, and recycling process and process this product after use, thereby determining the design and selection of production materials, packaging... in the most optimal way (Geissdoerfer et al., 2017). At the same time, for manufactured goods, it is also required to improve and change the design to meet the above "responsibility" and bring higher efficiency. Thus, the authors proposed H4 below: H4: Rethink is significantly affecting the circular economy in Vietnam. 2.6. Recover/Refuse (Ref) Recover: Recovering practices to put waste to use, repairing destroyed ecosystems to restore values (Geissdoerfer et al., 2017; Wang et al., 2014). Besides, recovery is the action of consumers, communities, and society to show supportive attitudes towards green, environmentally friendly, reusable products derived from activities. The production practices, and at the same time, refuse to use products that are not environmentally friendly, consume a lot of resources and energy in the process of use, are single-use, are not recyclable, and are not recyclable Original. Thus, the authors proposed H5 below: H5: Recover is significantly affecting the circular economy in Vietnam. Thus, the operation of the circular economy will have no waste on the environment, thus solving the problem of dealing with the relationship between economics and the environment. The circular economy can accomplish two things: (a) Minimizing the exploitation of raw materials from the natural environment and maintaining the ecosystem; (b) No longer releasing waste into the environment causing environmental pollution and degradation, and maintaining environmental quality (Adams et al., 2017; Adler et al., 2017; Allwood et al., 2011;). It is not only about recycling materials but also about reducing the use of difficult-to-recycle materials. Accordingly, not only decreasing dependence on resources and limiting emissions, circular economic models still bring significant benefits and promote economic growth. Figure 1 showed that there were five factors www.ce.vizja.pl 136 Factors Affecting the Circular Economy in Vietnam This work is licensed under a Creative Commons Attribution 4.0 International License. affecting the circular economy in Vietnam, five factors including Reduce (Red); Reuse (Reu); Recycle (Rec); Rethink (Ret); Recover/ and Refuse (Ref). 3. Methodology and Data3. Methodology and Data 3.1. Qualitative Research In this article, the qualitative method in this research is first described, and second, the quantitative approach is presented. The authors applied the in-depth interview to collect qualitative information through direct exchange, conversation, and discussion with a research subject. There, the research subjects can freely share their personal opinions and views, helping the research implementers to exploit in detail and go into many different areas and aspects of the problem of the circular economy. The qualitative method is carried out according to the following process: the authors conducted a review of the overview documents related to the research paper, which is the circular economy, to find the gaps in previous studies, research hypotheses, and proposed theoretical research models; At the same time, the authors discuss with 30 economic experts who are knowledgeable in the field of economics and sustainable development, the circular economy with many years of experience to complete the preliminary research scale. Qualitative research showed that 30 circular economy experts agree that the 5R model, developed based on the 3R model with the addition of 2Rs Rethink and Recover, is a critical determinant of the circular economy. Accordingly, qualitative research was conducted through discussions with 10 managers and 10 leaders of provinces, and 10 people teaching about the development economy at many public universities in Vietnam. 3.2. Quantitative Research Quantitative research was conducted to assess the reliability of circular economy components from the study conducted between January and June 2021. The authors applied a questionnaire survey to collect quantitative information on a large scale, using questionnaires to survey and survey, synthesizing all prepared questions to collect data from research subjects. The questions are usually 'closed' with a given answer option and/or Figure 1 Analytical Framework and Research Hypotheses 137 Pham Tien Dat, Nga Phan Thi Hang, Le Thi Thuy Hang 10.5709/ce.1897-9254.558DOI: CONTEMPORARY ECONOMICS Vol. 19 Issue 2 132-1472025 more open options for respondents to share and further explain their answers. The study was conducted with 450 questionnaires sent directly to 30 provinces. The official quantitative research sample includes 450 leaders. The official quantitative research sample consists of 450 leaders and other people working for 30 provinces in Vietnam. Each province surveyed 15 leaders and other people. This study used descriptive statistical tools, measuring mean value and standard deviation. In the simplest terms, when designing a questionnaire where the responses are coded as follows, it is a Likert scale. (a) Strongly disagree, (b) Disagree, (c) Neutral, (d) Agree, (e) Strongly agree. After collecting data from the survey, the authors proceed to use the data processing method through detailed steps as follows: Firstly, the authors applied the evaluation of Cronbach’s alpha reliability coefficient: According to Hair et al. (2021), to calculate Cronbach's alpha for a scale, the scale must have at least three measurement variables. Cronbach's alpha coefficient is variable [0.0-1.0]. Theoretically, the higher the Cronbach's alpha, the more reliable the scale is. However, if Cronbach's alpha coefficient is too large (α > 0.95), it shows that many variables in the scale do not differ. They measure the exact content of the research concept, which is the phenomenon of overlap in measurement. Secondly, the authors applied the exploratory Factor Analysis (EFA): According to Hair et al. (2021) showed that the exploratory factor analysis EFA aims to reduce a set of observed variables of highly significant factors, but for exploratory factor analysis, the following procedures should be performed: KMO test (Kaiser-Meyer-Olkin) measure) is more critical than 0.5, Bartlett's test means Sig < 0.05. The case of KMO less than 0.5 indicates that this analysis is not satisfactory on actual data from the market. Factors with Eigenvalue < 1 will be eliminated, only accepting elements with Eigenvalue is 1.0 and total variance extracted 50%. According to Hair et al. (2021), the how Eigenvalue and variance extracted must be based on the extraction method and factor rotation said that if its factors have a higher load factor than that factor and the load factor is smaller than the unmeasurable factor, then this observed variable meets the requirements and each observed variable is different. Load weight difference reaches 0.30 or more. According to Hair et al. (2021), the load factor of the scales reaching 0.3 is acceptable. If greater than 0.4 is good, if greater than 0.5 is very good for research, but for this study, the factor loading factor used by the authors is from 0.5 or more. Thirdly, the authors applied the confirmatory factor analysis (CFA): CFA analysis was performed to test the suitability of the scale, unidirectionality, combined reliability and total variance extracted, convergent value, and discriminant value. When the CFA is evaluated with good results, it will serve as a basis for testing the proposed hypotheses in the SEM theoretical model. Unidirectionality: Measuring the fit of the model with the collected information, the study considers Chi-square (CMIN), Chi-square adjusted for degrees of freedom (CMIN/df), the fitness index Comparative Fit Index (CFI), Tucker and Lewis Index (TLI), and Root Mean Square Error Approximation (RMSEA). If the model is considered appropriate when the TLI value is obtained, the CFI is 0.9; CMIN/df ≤ 2, or some other case CMIN/ df ≤ 3 (Hair et al., 2021); RMSEA ≤ 0.08, then market data are considered appropriate (Hair et al., 2008). However, recently, many research views have suggested that GFI (Goodness of fix index) is still acceptable when it is less than 0.9 (Hair et al., 2010). Evaluate the overall fit of the data based on the model fit indexes such as chisquare/df, comparative fit index (CFI), Tucker–Lewis’s index (TLI), the goodness of fit index (GFI), root mean square errors of approximation (RMSEA). Fourthly, the authors applied the structural equation model (SEM): Structural equation modeling (SEM) is an extension of the general linear model that allows the researcher to test a set of regression equations simultaneously. The SEM model combines all techniques, such as multivariable regression, factor analysis, and correlation analysis (between elements in the network diagram), to allow us to check the relationship complexity in the model. On the other hand, the linear structural model (SEM) provides a precise estimate of the variance parameters, and the data analyzed using the regression method is based on the observed measurements. A linear structural model can combine both observable and unobserved variables. In this case, the linear structural model effectively examines the degree of direct and indirect influence to test for multicollinearity. A criterion is used to evaluate the relationship between concepts in the theoretical model, that is, the value of the academic relationship of the hypotheses posed in the model; this criterion is statistically significant if p-value < 5%, then these hypotheses are accepted (Hair et al., 2010). The www.ce.vizja.pl 138 Factors Affecting the Circular Economy in Vietnam This work is licensed under a Creative Commons Attribution 4.0 International License. maximum Likelihood (ML) estimation method and Bootstrap test are used to test the theoretical model. The theoretical model must also achieve appropriate indicators, such as CFA. Finally, the authors applied the Bootstrap method to view the original sample as the population from which it is drawn, also from the replaceable resample original template where the original template plays the role of the crowd. On the other hand, this method also gives an estimate (ML) from the averaged sample, which tends to be close to the population estimate. From that, showing that the smaller the difference between the mean estimated by Bootstrap and the research model estimate with the initial sample, it can be concluded that the research model estimates can be trusted. To develop a circular economy in Vietnam, it is necessary to understand the nature and justification of this development method. To create the circular economy, it is essential to summarize and evaluate the existing development models for the agricultural, industrial, and service sectors and fields, thereby identifying development methods close to the circular economy approach as the basis for development according to the circular economy criteria. Awareness of the opportunities to take advantage of them is necessary. On the other hand, one must also see the challenges to the development of the circular economy that will be encountered to take measures to overcome them. 4. Results and Discussion4. Results and Discussion 4.1. Research Results Vietnam has many opportunities and challenges. Vietnam continues to affirm that fast and sustainable development is a consistent and transparent policy and viewpoint in Vietnam's economic development strategy. Prioritize rapid development to avoid falling behind, reduce the income gap between Vietnam and developing countries in the region, and develop sustainably. Sustainable economic development harmoniously solves the relationship between the two countries regarding economic growth and environmental protection. The concretization and successful implementation of the application of the knowledge-based economy is significant and is the focus of priority in national development policy. Many countries have succeeded in developing the local economy model and reaping many benefits. Vietnam has the opportunity to learn from the experiences of previous countries and draw lessons to apply accordingly to the domestic context. Regarding opportunities, the participation of the entire Vietnamese political system in solving national problems and Vietnam's commitment to the world community in participating in the Millennium Development Goals, achieving the sustainable development goals is an opportunity for promoting the development of the knowledge economy in Vietnam. The policy framework for developing the local economy model has not been clearly and precisely formulated about the challenge. Our country already has some eco-industrial models and ecoindustrial parks in operation, but there is no legal corridor for developing the eco-industrial park. In the coming time, it is necessary to have conclusions and complete synchronous development institutions suitable for this economic model. In addition, economic activities have been mainly based on a linear economic approach. The transition to a centralized economy needs a clear roadmap. Moreover, it is necessary to emphasize innovations in thinking and awareness and encourage initiatives in the production and supply chain to support the transformation to a market economy of enterprises. The correct understanding of the ecoeconomy needs to be made from input materials, design, consumption, deployment, reuse, recycling, and disposal for each industry. Each field needs consensus and agreement from leaders and management to each enterprise and people. With the goal of sustainable development closely associated with environmental protection, Vietnam needs to continue investing heavily in improving human resources quality, perfecting institutions and policies, and raising awareness of the whole society about applying the knowledge economy in life, digital technology, waste treatment and recycling technology, and infrastructure of industrial parks and ecological agriculture. Towards building a circular economy, the Government of Vietnam has made great efforts in environmental protection through many critical legal documents, strategies, and orientations, typi- 139 Pham Tien Dat, Nga Phan Thi Hang, Le Thi Thuy Hang 10.5709/ce.1897-9254.558DOI: CONTEMPORARY ECONOMICS Vol. 19 Issue 2 132-1472025 cally the Law on Environmental Protection, the National system on green growth for the period of 2021 - 2030, with a vision to 2050; Vietnam's renewable energy development strategy to 2030, vision to 2050; National strategy on integrated solid waste management to 2025, vision to 2050. At the same time, to achieve the set targets, Vietnam has been implementing a series of related programs to develop the circular economy. Several circular economic models have been implemented in Vietnam, bringing specific efficiency (Thai, 2021). In addition, to gradually form and develop the circular economy, over the past time, the Government has given tax incentives, capital, and land support to build waste recycling facilities, giving priority to the circular economy in the industrial sector. In the agricultural industry, Vietnam continued recycling and reusing industrial waste as raw materials for cement, building, and paper production. Vietnam has increased biomass energy and biogas, building a production model that combines waste treatment and energy regeneration. In the production chain, prioritize recycling and use of by-products and waste products from the fisheries, construction material production, textiles, footwear, etc., and promote energy production from quality urban waste. However, Vietnam is facing an increasing amount of waste generated while the source of raw and fossil materials is increasingly depleted, and technological difficulties exist. Table 1 shows that all of Cronbach's Alpha have over 0.6 values. This is the scientific basis for leaders to make appropriate decisions and recommendations for improving the circular economy. That is the best way to deal with the relationship between economic growth and adverse effects on resource depletion, pollution, and environmental degradation. In other words, we no longer have to trade-off between development and ecological degradation, economic and environmental protection, simultaneously realizing many sustainable development goals. To realize this orientation requires the efforts of all sectors of society, especially businesses are the central driving force, the State plays the role of creating, leading, and the community participates in the real world to change the perception and behavior of the whole society. Table 1 shows all items have a mean value of around 3.0. Besides, the Std. Deviation has a value of approximately 1.0. This data is perfect for improving the circular economy in Vietnam. Figure 2 showed that the assessment of the factors affecting the circular economy in Vietnam: CMIN/ DF = 3.120 (<5.0), GFI = 0.881 (>0.800), TLI = 0.934 (>0.900), CFI = 0.944 (> 0.9) and RMSEA = 0.071 (<0.08). Table 2 shows five factors affecting the circular economy in Vietnam with a significance level of 0.01. Besides, these results are science evident for policy implications to develop factors affecting the circular economy in Vietnam. From the argument about the circular economy, considering the nature, content, formation, and development process that has questioned the circular economy in Vietnam, it can be seen that there are factors affecting the circular economy this year. However, many other factors affect but have not been included in the research model, such as environmental law, sustainable development policy, and so on. Figure 3 showed that the assessment of the factors affecting the circular economy in Vietnam: CMIN/DF = 2.221 (< 5.0), GFI = 0.915 (>0.800), TLI = 0.962 (>0.900), CFI = 0.970 (> 0.900) and RMSEA = 0.054 (<5.0). Table 3 tested Bootstrap 2000 samples for factors affecting the circular economy in Vietnam with a significance level of 0.01. Besides, these results are science evident for policy implications to develop factors affecting the circular economy in Vietnam. 4.2. Research Result Discussion From the practical experience of many countries in the world and the perspectives on the circular economy, to promote this economic model in Vietnam, the following recommendation should be synchronously implemented: 1. The research result showed that the “reduce” factor affected the circular economy in Vietnam with a significance level of 0.01 and a standardized estimate is 0.380. The study results are consistent with reality and the same results as the study (Geissdoerfer et al., 2018). The circular economy in Vietnam still faces many difficulties and challenges. The biggest challenge in adopting the circu- www.ce.vizja.pl 146 Factors Affecting the Circular Economy in Vietnam This work is licensed under a Creative Commons Attribution 4.0 International License. model to become popular, widespread, and highly effective. From there, contributing to promoting the development of the national economy, protecting the living environment, saving natural resources, and creating the economic value we create are truly meaningful. Vietnam will grow stronger and advance internationally by demonstrating the nation's responsibility and obligations towards common global difficulties. AcknowledgmentsAcknowledgments The authors thank all lecturers and managers of the University of Finance - Marketing (UFM), Ho Chi Minh City. This article is supported and funded by UFM, Vietnam. ReferencesReferences Accorsi, R., Manzini, R., Pini, C., & Penazzi, S. (2015). 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