Investigating Linkages Between Industry 4.0 Technologies and Sustainability: A Sequential Mediation Analysis

ABSTRACT The study examines the link among Industry 4.0 (I4.0) technologies, environmental orientation, organizational flexibility, and the circular economy ( CE ) to drive sustainability. To ascertain these links, we analyze the responses of managers working in the manufacturing sector in India using PLS‐SEM. Relying on the resource‐based view (RBV), our findings confirmed that I4.0 and CE complement each other to achieve sustainability. Further, CE and environmental orientation mediate the link between I4.0 and sustainable performance. Additionally, sequential mediation indicates that (i) organizational flexibility and CE and (ii) environmental orientation and CE sequentially mediate between I4.0 and sustainability. This study sheds light on the interrelation of identified factors and provides actionable insights for manufacturing firms seeking to improve sustainability performance. Further, the findings suggest that the integration of I4.0 technologies and CE practices, supported by organizational flexibility and environmental orientation, can drive significant sustainable improvements. The study offers pivotal managerial implications for strategically aligning digital transformation and sustainability initiatives.