The Role of Supply Chain Capabilities in Linking Circular Economy Practices and Supply Chain Resilience

This study examines how circular economy (CE) practices relate to supply chain resilience (SCRES), focusing on the capability-based mechanisms through which CE strategies may influence resilience outcomes. Drawing on survey data from 125 Italian firms engaged in CE initiatives, we employ partial least squares structural equation modelling (PLS-SEM) to test the proposed relationships and complement this analysis with fuzzy-set qualitative comparative analysis (fsQCA) to identify configurational pathways leading to SCRES. PLS-SEM results indicate that CE practices strengthen several supply chain capabilities, with agility emerging as the only capability that mediates the relationship between CE and SCRES. FsQCA findings further reveal that SCRES can be achieved through multiple alternative configurations of CE practices and supply chain capabilities, pointing to three distinct resilience pathways: capabilities-driven, operations-driven and sustainability-driven strategies. This study contributes to the literature by clarifying the capability-based mechanisms linking CE and SCRES and highlighting the equifinal nature of resilience formation in circular supply chains. From a managerial perspective, the findings suggest that firms pursuing CE strategies should complement their adoption with targeted investments in agility and related capabilities to translate circular initiatives into resilient supply chain outcomes.