Driving Product Lifecycle Circularity through Circular Economy Adoption: The Roles of Innovation, Platforms, and Value Co-Creation

Abstract

Achieving product lifecycle circularity is a central challenge for firms transitioning toward sustainable production systems, particularly in manufacturing-intensive economies such as China. This study investigates how innovation-related capabilities, digital platforms, and value co-creation drive product lifecycle circularity through circular economy adoption. Using primary survey data collected from 395 respondents in China, the study applies Partial Least Squares Structural Equation Modeling (PLS-SEM) to test a comprehensive research framework. The results show that innovation network strength, innovation ecosystem dynamism, digital transformation readiness, platform-based business model innovation, and value co-creation capability positively influence circular economy adoption. Circular economy adoption, in turn, significantly enhances product lifecycle circularity. Product lifecycle orientation and collaborative consumption culture positively moderate this relationship. The study advances circular economy and innovation ecosystem literature by empirically establishing circular economy adoption as a key mechanism linking innovation, platforms, and co-creation to lifecycle circularity. Managers and policymakers can foster lifecycle circularity by strengthening innovation ecosystems, enhancing digital readiness, promoting platform-based models, and encouraging stakeholder co-creation. This study offers an integrated, ecosystem-oriented explanation of product lifecycle circularity and provides empirical evidence from China, a critical context for global circular economy transitions.