Unravelling the Digital Sustainability Myth: Reframing Smart Supply Chains Through Innovation and Circularity for Sustainability

Abstract

The study provides novel empirical evidence from the GCC on how smart supply chains foster sustainable supply chain performance, emphasizing the role of green innovation and circular economy practices. Grounded in the resource-based view and circular economy theory, the authors analyze survey data from 312 multinational enterprises. Findings reveal that mere adoption of smart supply chain does not guarantee sustainable supply chain performance, underscoring the limits of smart supply chain in emerging markets. On the contrary, findings indicate that SSC promotes green innovation by enabling MNEs’ visibility, predictive analytics, and collaboration, which in turn drives circular economy practices by enhancing firms' levels of eco-design, waste valorization, and closed-loop flows. Circular economy practices, being the most potent driver of sustainable supply chain performance, serve as the critical enabling mechanism that translates digitalization and innovation capacities into measurable sustainable supply chain performance.