Digital innovation for circular supply chain sustainability and resilience for achieving carbon neutrality: An empirical study

This study investigates the role of digital innovation within the Circular Economy (CE) by addressing two critical research gaps: conceptualizing digital innovation in the CE as a multidimensional construct and understanding its effects on circular supply chain performance under varying levels of social uncertainty. Unlike prior research that treats digitalization and circular economy initiatives separately, this study integrates the two perspectives by conceptualizing digital innovation in the CE as a second-order construct encompassing innovation capability, innovation focus, innovation collaboration, and innovation governance. Drawing on the dynamic capability view and contingency theory, the proposed model is empirically tested using data from 279 South African firms operating in high-carbon sectors. The findings reveal that heightened digital innovation in the CE significantly enhances both sustainability and resilience in circular supply chains aimed at achieving carbon neutrality, with a stronger impact observed on sustainability. Additionally, the study examines the moderating role of social uncertainties and finds that, although digital innovation remains beneficial, the moderating effects are not supported. This research contributes to the CE and digital supply chain literature by offering a new integrated framework, identifying key drivers of sustainable and resilient circular supply chains, and providing empirical insights from a dynamic emerging economy context.