Optimizing and restructuring resources for sustainable firm performance in the AI era: the role of dynamic capabilities and circular manufacturing

Sustainability has become a critical objective for businesses, particularly with the rapid advancement of AI-driven technologies. This study examines how AI enhances sustainable resource management by leveraging firms’ adaptive capabilities and circular economy principles. Integrating theoretical insights from resource-based and circular economy perspectives, the research investigates AI’s role in fostering economic, social, and environmental sustainability. Using data from 306 manufacturing firms in Vietnam, analyzed through Partial Least Squares Structural Equation Modeling (PLS-SEM), the findings reveal that AI significantly improves resource efficiency and sustainability performance. Moreover, competitive advantage strengthens the link between firms’ adaptive capabilities, circular strategies, and sustainability outcomes. This study contributes to the literature by offering empirical evidence on the synergetic impact of AI, adaptive capabilities, and circular approaches in shaping sustainable business practices. The findings underscore the necessity of embedding AI-driven strategies into sustainability frameworks to achieve long-term competitive and environmental resilience.