Building intellectual capital through circular economy and sustainable digital supply chains: evidence from GCC manufacturing sector

Abstract

Purpose This research investigates how circular economy practices and sustainable digital closed-loop supply chains impact economic performance and intellectual capital development in the manufacturing sector of Gulf Cooperation Council countries. The geographical region faces unique sustainability and financial challenges when addressing critical gaps in understanding how circular practices integrate with sustainable digital and closed-loop supply chains and leverage structural, human and relational capital. Design/methodology/approach Modeling sustainable digital closed-loop supply chain as a multidimensional construct mediating the relationship between the circularity practices and economic outcomes through the lens of intellectual capital, using 200 respondents from manufacturing firms, is the core of this research. The study applies the structural equation modeling approach and analyzes the model pathways that significantly enhance sustainable digital performance. Findings The results indicate that circular economy practices significantly enhance sustainable digital closed-loop supply chain performance, which in turn has a strong positive impact on economic performance. The mediating role of closed-loop supply chain performance indicates how structural and relational capital help in generating economic value. This indirect effect exceeds the direct effect of circular practices on economic performance. Practical implications The findings of this research offer guidance to managers and policymakers to consider circular economic initiatives as necessary investments toward developing intangible intellectual assets. Strengthening digital infrastructure, employee competencies and supply chain partnerships are critical in leveraging the circular economy–driven intellectual capital. Originality/value While earlier studies consider circular economy and digital closed-loop supply chain as only operational strategies to minimize waste and improve efficient use of resources, this study conceptualizes them as primary mechanisms for intellectual capital formation. This research is among the first empirical studies to examine the integration of circular practices and digital closed-loop supply chain performance through the intellectual capital lenses. This integrative approach extends intellectual capital theory into the sustainability and digitalization domains underpinning the economic performance in Gulf Cooperation Council manufacturing.