A Strategic Framework for Sustainable Manufacturing: Human Capital and Digital Circular Economy Models

This study presents an empirical investigation into how the strategic convergence of human capital and digital circular economy (DCE) practices enhances sustainability in manufacturing industries across emerging economies. Drawing on survey data from 273 respondents across seven developing countries, the research applies Partial Least Squares Structural Equation Modeling (PLS-SEM) to explore relationships among green HRM practices, DCE adoption, and multidimensional sustainability outcomes. Findings reveal that strategic HRM elements, such as digital upskilling, sustainability-oriented leadership, and an innovation-driven culture, significantly boost DCE implementation. Furthermore, DCE serves as a critical mediating mechanism, transforming human capital investment into measurable gains in economic, environmental, and social performance. Grounded in the Resource-Based View (RBV), Institutional Theory, and Circular Economy principles, the study proposes an integrative framework that captures both internal capabilities and external institutional pressures influencing sustainability. It also identifies contextual and regulatory factors as key moderators in these relationships. The study fills a crucial gap in the literature by empirically validating the synergistic impact of human capital and circularity on sustainable manufacturing. In practice, it offers valuable insights for policymakers and industry leaders seeking to embed circular economy principles through strategic HRM. Future research should explore longitudinal and cross-regional perspectives to deepen understanding of sustainable industrial transformation.