Moving towards a circular economy needs development of digital platforms and organizational capabilities for innovation, reconfiguration and capture for sustainable value. This study enquires the influence of institutional pressures (namely coercive, normative, and mimetic) on the circular performance of firms, resulting in better ecosystem innovation synergy as well as dynamic circular reconfiguration, circular value capture and circular financial performance. The goal of this study is to develop a theory-based model that links institutional theory, dynamic capabilities, and circular economy with circular economic value added. The data comprises 207 valid responses collected from companies in the logistics and supply chain sector. SmartPLS 4 is used to analyze data. The three institutional pressures have a significant impact on the circular economy capabilities. Coercive pressure and normative pressure influence ecosystem innovation synergy while mimetic pressure predicts dynamic circular reconfiguration. Moreover, dynamic circular reconfiguration is associated with measurable improvements in cost efficiency and revenue generation, thereby strengthening circular financial performance and circular economic value added. The study reveals that circular value capture has a significant impact on circular economic value added. The data indicates that ecosystem innovation synergy does not have a significant effect on circular value capture or circular financial performance. Ecosystem collaboration does not produce changes in firm economic performance unless it brings about internal reconfiguration. The findings suggest that both dynamic circular reconfiguration and circular performance became significant for circular economic value added in the context of circular finance. The routes of ecosystem innovation synergy and circular value capture, by their nature, are not sources of pressure. The findings enhance the understanding of how institutional pressures and potential capabilities enabled by digital platforms facilitate the transition to the circular economy. This paper finally provides theoretical and managerial insights for achieving sustainable value creation.

Purpose – This study explains how circular economy–oriented intangible resources are converted into sustained innovation outcomes by examining how circular intellectual capital (human, structural and relational) translates into generative performance through knowledge orchestration and circular transformation practices. Design/methodology/approach – We used a three-wave, time-lagged survey of managerial key informants from circular-initiative firms in Mainland China (final matched sample n = 122), spanning manufacturing and product-centric logistics/service SMEs. Hypotheses were tested using variance-based structural equation modeling (SEM) with bootstrapping. Findings – Circular human, structural and relational capital each positively predict both circular knowledge orchestration potential and circular knowledge orchestration realized. However, orchestration potential does not significantly translate into orchestration realized. Both orchestration states independently stimulate circular transformation practice, which in turn increases generative performance. Indirect effects are supported through two paths: (a) via orchestration potential and transformation practice and (b) via orchestration realized and transformation practice. Originality/value – The study advances resource orchestration logic in circular settings by showing that orchestration potential and realized are distinct capability states rather than a necessary sequence and by identifying circular transformation practice as the behavioral conduit through which circular intellectual capital yields generative performance.