Industry 4.0 and Digital Sustainability: The Role of Circular Ambidexterity and Circular Open Innovation in Marble Manufacturing

ABSTRACT Amid growing pressure for sustainable transformation, the role of Industry 4.0 technologies in enabling digital sustainability remains underexplored, particularly in resource‐intensive sectors of emerging economies. Drawing on the Resource‐Based View and Dynamic Capabilities View, this study investigates how Industry 4.0 adoption contributes to digital sustainability through the mechanism of circular ambidexterity and under the enabling condition of circular open innovation. Using data from the marble manufacturing sector in Pakistan, the study employs PROCESS Macro Model 7 to test a moderated mediation model. Findings reveal that Industry 4.0 has a significant direct effect on digital sustainability outcomes, but this effect is substantially amplified when mediated by circular ambidexterity. Moreover, the mediated relationship is significantly strengthened by circular open innovation, highlighting that collaborative ecosystems enhance the conversion of digital resources into sustainable value. The results underscore that while digital technologies contribute directly to sustainability, their transformative potential is realized most fully when coupled with dynamic capabilities and open collaboration. This study offers the first empirical evidence linking Industry 4.0, circular ambidexterity, and circular open innovation in the marble industry, providing context‐specific insights for resource‐intensive sectors in emerging economies. Theoretical and practical implications are discussed for leveraging Industry 4.0 toward transformative sustainability goals.