Exploring the Reverse Relationship between Circular Economy Innovation and Digital Sustainability—The Dual Mediation of Government Incentives

Abstract

The current study aims to examine the reverse association between circular economy innovation (CEI) and digital sustainability (DS), as well as the dual mediation of government incentives (GI) among firms. Data was collected through a structured-questionnaire-based survey among financial institutions (banks, insurance, and financial companies) in Pakistan, Malaysia, and China. The study collected data via structured questionnaires in an online survey and analysed the data using partial least squares structural equation modelling (PLS-SEM), to find results. The results revealed that CEI has a two-way relationship with the DS among firms in the defined context. Furthermore, the results confirmed the dual mediating role of GI between CEI and DS among firms. The outcomes can guide the policy makers to focus on the practices of CEI in the settings of the relevant state support schemes, to enhance the practices of DS among firms in emerging markets. The implications of the study are presented at the end of this study.