In the face of relentless global competition and regulatory pressures, the imperative for firms to digitally transform has become critical. This is particularly salient for Chinese manufacturing firms as they strive for sustainability, a multidimensional construct comprising both economic and environmental performance. Leveraging dynamic capabilities theory, this study aims to unravel the intricate interplay between digitalization, network capability, business model innovation (BMI), and environmental dynamism in shaping a firm’s sustainability performance. Our research is driven by a compelling question: How do digitalization and network capabilities impact firms’ sustainability performance, and what roles do BMI and environmental dynamism play in this relationship? To answer this question, we employed a robust survey-based methodology encompassing 1600 Chinese manufacturing firms, yielding 255 completed and validated responses. The findings reveal that network capability mediates the influence of digitalization on two types of BMI—novelty-centered and efficiency-centered. Further, these forms of BMI act as mediators between digitalization and network capability, and the two dimensions of sustainability: economic and environmental performance. Notably, environmental dynamism serves as a double-edged sword. It negatively moderates the impact of digitalization on efficiency-centered BMI, but positively moderates the influence of network capability on the same. Our study offers nuanced theoretical and practical implications. It extends dynamic capabilities theory by elucidating how digital and network capabilities can be leveraged for sustainable outcomes via business model innovation. Moreover, the research provides managerial insights, particularly for Chinese manufacturing firms, on navigating the complex landscape of digital transformation toward sustainability. Considering these insights, we recommend that firms prioritize network capabilities and strategically innovate their business models to harness the full potential of digital transformation. Simultaneously, organizations should be cognizant of the environmental dynamism within which they operate, as it can both hinder and enable their journey toward sustainability.

Purpose: Uncovering the relationship between Industry 4.0 (I4.0) technologies and circular economy (CE) practices is critical not only for implementing CE but also for leveraging I4.0 to achieve sustainable development goals. However, the potential connection between them – especially how different I4.0 technologies may influence various CE practices – remains inadequately researched. The purpose of this study was to quantitatively explore the impacts of various I4.0 technologies on CE practices.Design/methodology/approach: A mixed method consisting of a systematic literature review, content analysis, and social network analysis was adopted. First, 266 articles were selected and mined for contents of I4.0 technologies and CE practices; 27 I4.0 technologies and 21 CE practices were identified. Second, 62 articles were found that prove the positive influence of I4.0 technologies on CE practices, and 124 relationships were identified. Third, based on evidence supporting the link between I4.0 technologies and CE practices, a two-mode network and two one-mode networks were constructed, and their network density and degree centrality indicators were analyzed.Findings: I4.0 technologies have a low application scope and degree for promoting CE. The adoption of a single I4.0 technology has limited effect on CE practices, and wider benefits can be realized through integrating I4.0 technologies. The Internet of Things (IoT), additive manufacturing, big data and analytics, and artificial intelligence (AI) are among the top technologies promoting CE implementation and reduction and recycling were identified as the main mechanism. The integration of these technologies is the most popular and effective. Twelve CE practices were identified to be the most widely implemented and supported by I4.0 technologies.Research limitations/implications: First, only journal articles, reviews, and online publications written in English were selected, excluding articles published in other languages. Therefore, the results obtained only represent a specific group of scholars, which may be fragmented to a certain extent. Second, because the extraction of the impact of I4.0 on CE mainly relies on a manual literature review, this paper only provides the statistics of the number of publications involving relationships, while lacking the weight measurement of relationships.Originality/value: A comprehensive, quantitative, and visual analysis method was employed to unveil the current implementation levels of I4.0 technologies and CE practices. Further, it was explored how different I4.0 technologies can affect various CE aspects, how different I4.0 technologies are integrated to promote CE realization, and how various CE practices are implemented simultaneously by I4.0 technologies.