IDEAS home Printed from https://ideas.repec.org/a/wly/sustdv/v34y2026i2p1596-1621.html

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/sd.70278
    Download Restriction: no
    File URL: https://libkey.io/10.1002/sd.70278?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Francesca Manes-Rossi & Giuseppe Nicolò & Daniela Argento, 2020. "Non-financial reporting formats in public sector organizations: a structured literature review," Journal of Public Budgeting, Accounting & Financial Management, Emerald Group Publishing Limited, vol. 32(4), pages 639-669, July.
    2. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    3. Sara Saberi & Mahtab Kouhizadeh & Joseph Sarkis & Lejia Shen, 2019. "Blockchain technology and its relationships to sustainable supply chain management," International Journal of Production Research, Taylor & Francis Journals, vol. 57(7), pages 2117-2135, April.
    4. Jeffrey D. Sachs & Guido Schmidt-Traub & Mariana Mazzucato & Dirk Messner & Nebojsa Nakicenovic & Johan Rockström, 2019. "Six Transformations to achieve the Sustainable Development Goals," Nature Sustainability, Nature, vol. 2(9), pages 805-814, September.
    5. Jianing, Pang & Bai, Keke & Solangi, Yasir Ahmed & Magazzino, Cosimo & Ayaz, Kamran, 2024. "Examining the role of digitalization and technological innovation in promoting sustainable natural resource exploitation," Resources Policy, Elsevier, vol. 92(C).
    6. United Nations UN, 2015. "Transforming our World: the 2030 Agenda for Sustainable Development," Working Papers id:7559, eSocialSciences.
    7. repec:eme:aaaj00:aaaj-12-2019-4356 is not listed on IDEAS
    8. Korhonen, Jouni & Honkasalo, Antero & Seppälä, Jyri, 2018. "Circular Economy: The Concept and its Limitations," Ecological Economics, Elsevier, vol. 143(C), pages 37-46.
    9. Jessica Müller & Ángel Acevedo-Duque & Sheyla Müller & Prateek Kalia & Khalid Mehmood, 2021. "Predictive Sustainability Model Based on the Theory of Planned Behavior Incorporating Ecological Conscience and Moral Obligation," Sustainability, MDPI, vol. 13(8), pages 1-16, April.
    10. Kouhizadeh, Mahtab & Saberi, Sara & Sarkis, Joseph, 2021. "Blockchain technology and the sustainable supply chain: Theoretically exploring adoption barriers," International Journal of Production Economics, Elsevier, vol. 231(C).
    11. Patrick Schroeder & Kartika Anggraeni & Uwe Weber, 2019. "The Relevance of Circular Economy Practices to the Sustainable Development Goals," Journal of Industrial Ecology, Yale University, vol. 23(1), pages 77-95, February.
    12. Disraeli Asante-Darko & Samuel Ato Dadzie & Amoako Kwarteng & Sena Agbodjah & Theodora Ekua Aryee, 2024. "Effects of Circular Economy Practices and Accounting Innovations on Sustainable Development Goals," Circular Economy and Sustainability, Springer, vol. 4(4), pages 3059-3092, December.
    13. Yudi Fernando & Muhammad Shabir Shaharudin & Ahmed Zainul Abideen, 2022. "Circular economy-based reverse logistics: dynamic interplay between sustainable resource commitment and financial performance," European Journal of Management and Business Economics, Emerald Group Publishing Limited, vol. 32(1), pages 91-112, February.
    14. Luo, Le & Tang, Qingliang, 2014. "Does voluntary carbon disclosure reflect underlying carbon performance?," Journal of Contemporary Accounting and Economics, Elsevier, vol. 10(3), pages 191-205.
    15. Zhao, Qiuyun & Jiang, Mei & Zhao, Zuoxiang & Liu, Fan & Zhou, Li, 2024. "The impact of green innovation on carbon reduction efficiency in China: Evidence from machine learning validation," Energy Economics, Elsevier, vol. 133(C).
    16. Joseph Sarkis & Qingyun Zhu, 2018. "Environmental sustainability and production: taking the road less travelled," International Journal of Production Research, Taylor & Francis Journals, vol. 56(1-2), pages 743-759, January.
    17. Rosamartina, Schena & Giustina, Secundo & Domenico, De Fano & Pasquale, Del Vecchio & Angeloantonio, Russo, 2022. "Digital reputation and firm performance: The moderating role of firm orientation towards sustainable development goals (SDGs)," Journal of Business Research, Elsevier, vol. 152(C), pages 315-325.
    18. Alan Murray & Keith Skene & Kathryn Haynes, 2017. "The Circular Economy: An Interdisciplinary Exploration of the Concept and Application in a Global Context," Journal of Business Ethics, Springer, vol. 140(3), pages 369-380, February.
    19. Charbel Jose Chiappetta Jabbour & Stefan Seuring & Ana Beatriz Lopes De Sousa Jabbour & Daniel Jugend & Paula de Camargo Fiorini & Hengky Latan & Wagner Colucci Izeppi, 2020. "Stakeholders, innovative business models for the circular economy and sustainable performance of firms in an emerging economy facing institutional voids," Post-Print hal-04275092, HAL.
    20. repec:eme:jaar00:jaar-06-2020-0116 is not listed on IDEAS
    21. Hwong-Wen Ma & Hsiu-Ching Shih & Meng-I Liao, 2021. "Circular Economy and New Research Directions in Sustainability," International Series in Operations Research & Management Science, in: Chialin Chen & Yihsu Chen & Vaidyanathan Jayaraman (ed.), Pursuing Sustainability, chapter 0, pages 141-168, Springer.
    22. Amr Elalfy & Olaf Weber & Sean Geobey, 2021. "The Sustainable Development Goals (SDGs): a rising tide lifts all boats? Global reporting implications in a post SDGs world," Journal of Applied Accounting Research, Emerald Group Publishing Limited, vol. 22(3), pages 557-575, February.
    23. Olivier Boiral & David Talbot & Marie-Christine Brotherton & Iñaki Heras-Saizarbitoria, 2021. "Sustainability rating and moral fictionalism: opening the black box of nonfinancial agencies," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 34(8), pages 1740-1768, April.
    24. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ashish Adholiya, 2025. "Evaluating the Impact of Digitalization on Circular Economy Growth: Insights from Structural Equation Modelling," Circular Economy and Sustainability, Springer, vol. 5(6), pages 4889-4918, November.
    2. Mohammadreza Akbari & John L. Hopkins, 2022. "Digital technologies as enablers of supply chain sustainability in an emerging economy," Operations Management Research, Springer, vol. 15(3), pages 689-710, December.
    3. Woon Leong Lin & Nelvin Xe Chung Leow & Wai Mun Lim & Ming Kang Ho & Jing Yi Yong & Chuen Khee Pek, 2025. "The influence of blockchain technology on circular economy implementation in the automotive sector: From a GMM model to a new machine learning algorithm," Business Strategy and the Environment, Wiley Blackwell, vol. 34(1), pages 1043-1061, January.
    4. Belmonte-Ureña, Luis Jesús & Plaza-Úbeda, José Antonio & Vazquez-Brust, Diego & Yakovleva, Natalia, 2021. "Circular economy, degrowth and green growth as pathways for research on sustainable development goals: A global analysis and future agenda," Ecological Economics, Elsevier, vol. 185(C).
    5. Sohail, Muhammad Tayyab & Ullah, Sana & Sohail, Sidra, 2025. "How does the circular economy affect energy security and renewable energy development?," Energy, Elsevier, vol. 320(C).
    6. Vivian Osei & Disraeli Asante-Darko & Matthew Quayson, 2024. "Stakeholder Pressure, Circular Economy Practices, and Sustainability Performance: The Moderating Effect of Ecological Innovation Capabilities," Circular Economy and Sustainability, Springer, vol. 4(4), pages 3139-3170, December.
    7. German Arana‐Landin & Waleska Sigüenza & Beñat Landeta‐Manzano & Iker Laskurain‐Iturbe, 2024. "Circular economy: On the road to ISO 59000 family of standards," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(3), pages 1977-2009, May.
    8. Dragana Ostic & Ummar Faruk Saeed & Angelina Kissiwaa Twum & Rahmatu Chibsah, 2025. "Transition Toward a Sustainable Circular Economy: A Perspective on Green Innovation and Governance Policy Using a Novel MMQR Approach," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(4), pages 5719-5741, August.
    9. Rabah Arezki & Hieu Nguyen, 2026. "On the Asymmetry between Conflict and Development: Evidence from Sustainable Development Goals," CERDI Working papers hal-05492339, HAL.
    10. Magdalena Rusch & Josef‐Peter Schöggl & Rupert J. Baumgartner, 2023. "Application of digital technologies for sustainable product management in a circular economy: A review," Business Strategy and the Environment, Wiley Blackwell, vol. 32(3), pages 1159-1174, March.
    11. Zhang Yu & Muhammad Umar & S. Abdul Rehman, 2022. "Adoption of technological innovation and recycling practices in automobile sector: under the Covid-19 pandemic," Operations Management Research, Springer, vol. 15(1), pages 298-306, June.
    12. Donatella Saccone, 2021. "Can the Covid19 pandemic affect the achievement of the ‘Zero Hunger’ goal? Some preliminary reflections," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(7), pages 1025-1038, September.
    13. Alejandro Aristi Capetillo & Fredric Bauer & Cristina Chaminade, 2023. "Emerging Technologies Supporting the Transition to a Circular Economy in the Plastic Materials Value Chain," Circular Economy and Sustainability, Springer, vol. 3(2), pages 953-982, June.
    14. Peterson K. Ozili & Paul Terhemba Iorember, 2024. "Financial stability and sustainable development," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(3), pages 2620-2646, July.
    15. Andrea Cecchin & Roberta Salomone & Pauline Deutz & Andrea Raggi & Laura Cutaia, 2021. "What Is in a Name? The Rising Star of the Circular Economy as a Resource-Related Concept for Sustainable Development," Circular Economy and Sustainability, Springer, vol. 1(1), pages 83-97, June.
    16. Chembessi Chedrak & Gohoungodji Paulin & Juste Rajaonson, 2023. "“A fine wine, better with age”: Circular economy historical roots and influential publications: A bibliometric analysis using Reference Publication Year Spectroscopy (RPYS)," Journal of Industrial Ecology, Yale University, vol. 27(6), pages 1593-1612, December.
    17. Olorunfemi Yasiru Alimi & Omolara Ayotunde Campbell & Fatimah Ololade Bolarinwa, 2025. "Pathways to Achieving SDGs in Africa: Investigating the Impact of Digitalization and Labor Market Productivity on Income, Employment, Poverty, and Inequality," World Affairs, John Wiley & Sons, vol. 188(4), December.
    18. Sen, Kanchan Kumar & Karmaker, Shamal Chandra & Chapman, Andrew J. & Saha, Bidyut Baran, 2025. "How does environmental policy shape the impact of energy innovation funding on renewable energy generation? Evidence from econometric and machine learning approaches," Energy Economics, Elsevier, vol. 150(C).
    19. Jéssica dos Santos Leite Gonella & Moacir Godinho Filho & Gilberto Miller Devós Ganga & Fabiane Leticia Lizarelli, 2024. "From awareness to action: Understanding the relationship between circular economy and favourable evaluation towards sustainable development," Business Strategy and the Environment, Wiley Blackwell, vol. 33(8), pages 8679-8694, December.
    20. Osei, Vivian & Bai, Chunguang & Asante-Darko, Disraeli & Quayson, Matthew, 2023. "Evaluating the barriers and drivers of adopting circular economy for improving sustainability in the mining industry," Resources Policy, Elsevier, vol. 86(PB).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:sustdv:v:34:y:2026:i:2:p:1596-1621. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-1719 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.