The Role of Digital Transformation in Promoting Circular Economy Practices: An Empirical Study of the Vietnamese Public Sector

ABSTRACT The digital age has introduced both challenges and opportunities for public organizations. The public sector is undergoing significant changes, reshaping not only how organizations operate but also their culture and internal dynamics. In this context, digital transformation appears to be a concept that is gaining attention as an approach to help leverage the circular economy principle in public organizations. This study aims to explore the connection between digital transformation and circular economy practices within the Vietnamese public sector. Furthermore, the research also examines the key factors influencing the effectiveness of digital transformation, including technological capabilities and organizational readiness. By combining Resource‐Based View Theory and Dynamic Capability Theory, the study uses a quantitative approach. The top and middle executive managers in the public sector are the target respondents. The study also found that the influence of technological capability and organizational readiness extends to both digital transformation and circular economy principles. This analysis contributes to the existing literature by offering valuable insights into how digital transformation will shape the circular economy in the Vietnamese public sector, providing actionable recommendations for public organization leaders and policymakers in Vietnam to foster a more inclusive and sustainable digital environment.