The Impact of Green Supply Chain Management on Circular Economy Performance: The Moderating Role of IT Capability

Abstract

This study investigates the impact of Green Supply Chain Management (GSCM) on Circular Economy Performance (CEP) in Pakistan's manufacturing sector by examining the mediating roles of green product, green process, and green management innovation, alongside the moderating role of IT capability. A quantitative, deductive, and explanatory research design was adopted. Data were collected from 207 supply chain professionals using a structured five-point Likert-scale questionnaire through purposive sampling. Partial Least Squares Structural Equation Modeling (PLS-SEM) was employed to assess the measurement and structural models, including direct, mediating, and moderating relationships.  The results indicate that GSCM significantly enhances green product, green process, and green management innovation. GSCM, green product innovation, and green process innovation positively influence CEP, whereas green management innovation has no significant direct effect. Green product and green process innovation significantly mediate the GSCM–CEP relationship, while green management innovation exhibits only a negligible mediating effect. IT capability significantly moderates the relationships between GSCM and CEP and between green process innovation and CEP but does not strengthen the effects of green product or green management innovation on CEP.  This study extends the GSCM literature by integrating multiple dimensions of green innovation with IT capability in a single framework, providing practical insights for manufacturing firms seeking to accelerate circular economy adoption and sustainable competitive performance in emerging economies.