Digitalization, finance, and resource efficiency: advancing pakistan’s circular economy

Saba Bukhari (), Ishfaq Ahmad (), Ghulam Mustafa (), Agha Amad Nabi () and Khalid Zaman ()
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Saba Bukhari: The Sherwan Institute of Online Education (SIOE), Department of Research
Ishfaq Ahmad: The University of Lahore, Lahore Business School (LBS), Faculty of Management Sciences
Ghulam Mustafa: University of the Punjab,Quaid-i-Azam Campus, School of Economics
Agha Amad Nabi: Government College University, Department of Business Administration
Khalid Zaman: The University of Haripur, Department of Economics

SN Business & Economics, 2025, vol. 5, issue 12, 1-29

Abstract: Abstract Rising urbanization, resource dependence, and waste production pose a threat to Pakistan’s environmental and economic sustainability. Thus, a shift to a circular economy is a key aim of sustainable development policy. Digitalization, sustainable finance, and circular design principles are becoming acknowledged as tools for a circular economy, although their efficacy in resource-constrained conditions is uncertain. Pakistan presents a unique opportunity to study how these two factors influence circular outcomes, given its rapidly expanding industrial base and increasing e-waste. The study used a two-stage least squares (2SLS) and time series Generalized Methods of Moment (GMM) estimator for parameter estimates from 1995Q1–2022Q4 data. Digitization, sustainable finance, circular design acceptance, e-waste management, and circular supply chain resilience are vital to Pakistan’s circular economy success. Technology advancement and resource efficiency may be trade-offs since digitalization hurts circular economy outcomes. Sustainable finance is becoming increasingly significant in promoting circular design and ecologically sound company practices. The consequential links between digitization, e-waste management, and circular supply chain resilience emphasize the need for integrated waste reduction and supply chain efficiency measures. Granger causality tests confirm relationships by showing varying directional effects. Circular economy activities with sustainable finance boost circular design adoption. This improves resource efficiency and waste minimization. As a feedback loop where innovative manufacturing processes foster technological integration, circular design ideas benefit digitalization endeavors. Finally, variance decomposition analysis predicts the variables’ circular economy variability contributions till 2033. The results highlight how e-waste management is becoming increasingly essential in environmental policy and how digitization and sustainable financing affect economic sustainability. This study contributes to the digital-driven circular economy literature by offering visions for a sustainable and inclusive future.

Keywords: Circular economy; Digitalization; Sustainable financing opportunities; Circular design adoption rate; E-Waste generation rate; Circular supply chain resilience; Pakistan (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s43546-025-00994-6

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