Leadership and learning mechanisms for circular economy practices: a moderated mediation model of circular relational capital and stakeholder pressure

Purpose Drawing on the resource-based view (RBV) and stakeholder theory (ST), this study examines the direct relationship between green transformational leadership (GTL) and circular economy practices (CEPs). It also examines the mediating role of ambidextrous learning mechanisms (i.e. exploitative and explorative learning) in the relationship between GTL and CEPs, and it tests the moderating role of both circular relational capital (CRC) and stakeholder pressure (SP) in the mediated paths. Design/methodology/approach The study uses the partial least squares-structural equation modelling method to examine the moderated mediation model on 438 responses from employees working in different organisations in Bangladesh and India. Findings The results show a strong and positive relationship between GTL and CEPs. Furthermore, both exploitative and explorative learning mechanisms are significant mediators between GTL and CEPs, underscoring the significant role of learning approaches in translating leadership into circularity. Also, both CRC and SP are strong moderators in igniting the mediation paths, validating the moderated mediation model of this study. Originality/value Based on RBV and ST, this research incorporates ambidextrous learning mechanisms as mediators, and CRC and SP as moderators, to develop a comprehensive moderated mediation conceptual model. This robust model helps deepen the understanding of how leadership, learning, relational and stakeholder-related approaches and factors can be effective in achieving circularity. Thus, the study provides novel findings on how organisations in developing countries can leverage internal and external aspects in gaining CEPs.