Digital transformation and the circular economy: an institutional theory perspective

Shiyuan Yin, Mengqi Jiang, Lujie Chen*, Fu Jia*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)


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.

Original languageEnglish
Pages (from-to)1627-1655
Number of pages29
JournalIndustrial Management and Data Systems
Issue number4
Publication statusPublished - 12 Apr 2024


  • Circular economy
  • Digital transformation
  • Institutional theory
  • Secondary data analysis
  • Sustainability


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