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The Influence of Circular Economy on Firm Orientation Toward Sustainable Development Goals: The Moderating Role of Technological Innovation in the Automotive Industry

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  • Woon Leong Lin

Abstract

This study aims to examine the influence of Circular Economy (CE) practices on firm orientation toward Sustainable Development Goals (SDGs) within the automotive industry, with a particular focus on the moderating role of technological innovation. Using panel data from major global automotive firms over the period 2016 to 2022, we employed the System Generalized Method of Moments (SYS‐GMM) technique to address endogeneity and dynamic panel bias. CE practices were assessed through sustainability‐related metrics, while SDG disclosure performance was evaluated based on depth, breadth, and concentration dimensions. The empirical findings reveal that CE practices significantly enhance the depth and breadth of firms' SDG disclosures, although they may reduce the concentration of disclosures across specific goals. Furthermore, technological innovation positively moderates these relationships, amplifying the impact of CE practices by enabling more comprehensive and detailed SDG reporting through advanced technologies such as artificial intelligence, big data analytics, and the Internet of Things. The results emphasize the strategic value of integrating CE initiatives with technological innovation to drive sustainability performance and reporting transparency in the automotive sector. Policy recommendations include promoting supportive regulatory frameworks, offering financial incentives for green technological investments, and enforcing comprehensive sustainability reporting standards. This study contributes to the literature by providing robust empirical evidence on the synergistic role of CE and technological innovation in advancing corporate contributions toward SDGs in the automotive industry.

Suggested Citation

  • Woon Leong Lin, 2026. "The Influence of Circular Economy on Firm Orientation Toward Sustainable Development Goals: The Moderating Role of Technological Innovation in the Automotive Industry," Sustainable Development, John Wiley & Sons, Ltd., vol. 34(2), pages 1596-1621, April.
    • Handle: RePEc:wly:sustdv:v:34:y:2026:i:2:p:1596-1621
    DOI: 10.1002/sd.70278
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