Digitalization for a Sustainable Performance: Dual-Study Analysis of Digital Leadership, Circular Economy, and Technological Innovation

This research investigates the impact of digital leadership on organizational performance using a mediating role of circular economy practices. Moreover, this research also examines the moderating role of technological innovation in the relationship between circular economy and organizational performance. This research is based on two independent studies in two different economy manufacturing sectors including textile and automobiles in East Southern China. In study 1, the data were collected from 282 respondents including employees and supervisors in textile manufacturing organizations from Henan, China. In study 2, the data were collected from 256 employees and supervisors from automobile manufacturing in Hefei, China. We employed a cross-sectional design in study 1 and a time-lag design in study 2 by using systematic random sampling techniques in both studies. The findings of study 1 indicate that digital leadership has a significant impact on circular economy practices and that circular economy practices have a positive impact on organization performance. The findings also indicate that circular economy practices significantly mediate the association between digital leadership and organizational performance. The findings of study 2 show that technological innovation positively moderates the relationship between circular economy practices and organizational performance and that as the influence of technological innovation increases, this relationship becomes stronger. This research also provides useful insights for scholars and policy makers to reform manufacturing processes to encourage circular economy practices.