When Does Transparency Matter for Consumers’ Circular Decisions? Visibility and Traceability in Closed-Loop Supply Chains

Markets are increasingly demanding greater supply chain transparency, yet this remains a significant challenge for many companies. Understanding whether and what type of information to disclose represents a significant challenge for companies, particularly when the information pertains to circular initiatives, such as those involved in closed-loop activities. This study, grounded in signaling theory, explores the effect of disclosing closed-loop supply chain information on consumers' intentions. We selected consumers as our unit of analysis for the active role they can play when referring to companies’ closed-loop initiatives, such as purchasing recycled products or participating in take-back programs. To test the hypotheses, two scenario-based experiments are conducted. The primary aim of the studies is to operationalize supply chain transparency through its visibility and traceability components in a closed-loop supply chain context. A second objective is to examine the effectiveness of transparency in closed-loop supply chains, analyzing how the two components influence consumer outcomes across different phases of the customer journey. The findings contribute to the growing literature on supply chain transparency, identifying the boundaries of signaling theory and offering insights for managers on strategic investments in transparency.