Industry 4.0 technologies and circular economy: Implications for sustainable development in manufacturing firms
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Abstract
The objective of this study is to analyze the relationship between Industry 4.0 technologies, circular economy practices, and sustainable development activities implemented by manufacturing firms in the automotive and aerospace industries. Literature has shown inconclusive evidence connecting these three constructs, while the recent increase in environmental shocks due to climate change is forcing all industries to modify their production strategies. To achieve this objective, a survey was distributed to a sample of 378 manufacturing firms in the automotive and aerospace industries in Mexico, and the results were validated using PLS-SEM. The findings suggest that the adoption of Industry 4.0 technologies has significant positive effects, both on sustainable development and on circular economy practices. In addition, circular economy practices have a significant positive effect on sustainable development, and positively mediate the relationship between Industry 4.0 technologies and sustainable development. Therefore, it is concluded that the simultaneous adoption of Industry 4.0 technologies and circular economy practices in manufacturing firms increases the
possibilities of significantly improving the level of sustainable development activities.
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