Exploring the nexus of institutional factors and regulatory focus in driving platform-based servitization and circular economy adoption

Although digitalization has garnered considerable attention in service management literature, integrating a platform-based approach to boost circular economy (CE) practices remains relatively underexplored. Grounded in the institutional-based theory and regulatory focus theory, this paper investigates how institutional-level factors and regulatory focus (RF) foster platform-based servitization (PBS), driving CE practices in business firms. Using data drawn from a paper-based survey of 390 managers from 143 service firms in China, this study used the partial least square structural equation modeling (PLS-SEM) technique to analyze the data. The findings reveal that metaverse, network collaboration, and environmental disclosure significantly and positively impact fostering PBS. PBS, in turn, acts as a mediator, potentially influencing the implementation of CE practices in business firms. Further, promotion-RF positively moderates the relationship between fostering PBS in business firms and implementing CE practices, whereas preventive-RF negatively moderates this relationship. These findings provide actionable recommendations for managers and industry practitioners to formulate business strategies that fully harness the potential of promoting PBS and CE beyond purely technological benefits.