Digital transformation and the circular economy: an institutional theory perspective
Industrial Management & Data Systems
ISSN: 0263-5577
Article publication date: 2 April 2024
Issue publication date: 12 April 2024
Abstract
Purpose
Within the current institutional landscape, characterized by increased societal and governmental emphasis on environmental preservation, there is growing interest in the potential of digital transformation (DT) to advance the circular economy (CE). Nonetheless, the empirical substantiation of the connection between DT and CE remains limited. This study seeks to investigate the impact of DT on CE at the organizational level and examine how various institutional factors may shape this relationship within the Chinese context.
Design/methodology/approach
To scrutinize this association, we construct a research framework and formulate hypotheses drawing on institutional theory, obtaining panel data from 238 Chinese-listed high-tech manufacturing firms from 2006 to 2019. A regression analysis approach is adopted for the sample data.
Findings
Our regression analysis reveals a positive influence of DT on CE performance at the organizational level. Furthermore, our findings suggest that the strength of this relationship is bolstered in the presence of heightened regional institutional development and industry competition. Notably, we find no discernible effect of a firm’s political connections on the DT–CE performance nexus.
Originality/value
This study furnishes empirical evidence on the relationship between DT and CE performance. By elucidating the determinants of this relationship within the distinct context of Chinese institutions, our research offers theoretical and practical insights, thus laying the groundwork for subsequent investigations into this burgeoning area of inquiry.
Keywords
Acknowledgements
The authors gratefully acknowledge the financial support by Natural Science Foundation of China Young Scientist Fund (no. 71902159) and RDF-01-17 by Xi’an Jiaotong-Liverpool University.
Citation
Yin, S., Jiang, M., Chen, L. and Jia, F. (2024), "Digital transformation and the circular economy: an institutional theory perspective", Industrial Management & Data Systems, Vol. 124 No. 4, pp. 1627-1655. https://doi.org/10.1108/IMDS-10-2023-0792
Publisher
:Emerald Publishing Limited
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