The impact of dynamic capabilities on circular economy: the mediating effect of the industrial Internet of things

Purpose The current study aimed to identify the impact of the dynamic capabilities on the circular economy in Jordan's small- and medium-sized manufacturing enterprises sector as and the mediating role of industrial Internet of things. Design/methodology/approach This study surveyed small and medium manufacturing enterprises operating in Jordan and collected 459 responses through an online self-administered questionnaire. The effects of dynamic capabilities and the industrial Internet of things on the circular economy were analyzed using covariance-based structural equation modeling (CB-SEM). Findings Empirical results showed that all hypotheses are accepted. The results also revealed that the relationship between dynamic capabilities (sensing, seizing and reconfiguring) on a circular economy is mediated by the industrial Internet of things. Originality/value This work expanded the application of the dynamic capabilities view to investigate the antecedent effects of the industrial Internet of things and the circular economy and deepened understanding of the dynamic capabilities view theory in assessing the dynamic activities of these firms based on the three dimensions of sensing, seizing and reconfiguring. In general, this study made a theoretical and managerial contribution to supply chain and circular economy literature.