Metaverse adoption in the manufacturing industry: impact on social and environmental sustainability performance

Purpose This study aims to examine the adoption of Metaverse technology in the manufacturing industry and its potential impact on firms’ social and environmental sustainability performance. Design/methodology/approach Data were collected from 157 technology-based firms in the Malaysian high-tech manufacturing industry and analyzed using PLS-SEM to investigate the influence of social (i.e. social capital, open/innovative culture and empowerment) and technological factors (i.e. digitalization preparedness, integrability and strategic value) on Metaverse adoption and the moderating roles of digital trust and absorptive capacity. Findings Social and technological factors were found to significantly impact Metaverse adoption, with digital trust enhancing the influence of social factors. Absorptive capacity strengthens firms’ abilities to use social factors for adoption. However, digital trust does not significantly moderate the relationship between technological factors and adoption, nor does absorptive capacity impact this relationship. Finally, Metaverse adoption is shown to positively contribute to firms’ social sustainability, improving social well-being and equity, but it does not significantly impact environmental sustainability. Practical implications For practitioners, the study highlights the importance of fostering an organizational culture that supports digital trust and developing absorptive capacity as critical enablers of successful Metaverse adoption. Policy implications include the need for creating supportive policies that encourage digital transformation efforts aligned with sustainability goals. Originality/value Theoretically, this study integrates the Technology-Organization-Environment (TOE) framework, Human-Organization-Technology fit (HOT-fit) framework and Resource-Based View (RBV) to improve understanding of technology adoption and sustainability performance. From a managerial perspective, it highlights the importance of fostering digital trust and developing absorptive capacity as critical enablers of successful Metaverse adoption. Policy implications include the need for policies supporting digital transformation efforts aligned with sustainability goals.