Unveiling the impact of carbon-neutral policies on vital resources in Industry 4.0 driven smart manufacturing: A data-driven investigation

Abstract

The study aims to empirically examine the effect of carbon-neutrality policies on the key resources needed for Industry 4.0 driven smart manufacturing and how these resources can provide a sustainable competitive advantage. The theoretical framework is integrated with the institutional theory and the resource-based view (RBV). The empirical method is used for collecting data through surveys and further covariance-based structural equation modeling is used to test the hypotheses. Findings indicate that carbon–neutral-based government policies have a stronger influence on tangible resources and human skills than intangible resources related to Industry 4.0 driven smart manufacturing. Second, carbon–neutral policy alignment with the firm’s sustainability objectives plays a moderating effect on the relationship between carbon–neutral-based government policies and resources (tangible, intangible resources and human skills) for Industry 4.0 driven smart manufacturing. Lastly, the three resources (tangible, intangible resources and human skills) for Industry 4.0 driven smart manufacturing play a critical role in developing firms’ carbon–neutral capability and further enhancing operational performance. Managerial implications include investment in advanced digital technologies, developing a strong mindset among employees and supply chain stakeholders, and designing training programs for enhancing smart manufacturing performance to develop carbon-neutrality capability. This study proposes a hybrid theory in the context of carbon neutrality by integrating institutional theory and RBV. This is the first study that examines the effect of carbon neutrality-based government policies on vital Industry 4.0-driven smart manufacturing resources and the indirect effect on carbon neutrality capability and operational performance.