Green transition, circular economy practices and sustainable performance: the curvilinear role of digital platform capabilities

Purpose While digitalization is acknowledged as a key driver of organizational transformation, its specific role in advancing sustainability outcomes in resource-constrained firms is less understood. This study, grounded in dynamic capabilities theory (DCT), aims to investigate how digital platform integration and reconfiguration jointly affect green transition (GT), circular economy (CE) practices and sustainable performance (SP) in Vietnamese small and medium-sized enterprises. Design/methodology/approach Based on data collected from 286 Vietnamese firms, linear, polynomial regression and response surface analysis are employed to test the hypotheses. Findings The results show that both integration and reconfiguration capabilities positively influence GT, CE practices and SP, with the strongest effects arising from their balanced development. Misalignment between these capabilities weakens SP. Additionally, GT and CE practices mediate the link between digital platform capabilities and sustainability, indicating that digital transformation enhances sustainability chiefly through environmental and circular initiatives. Practical implications Practical insights are offered for managers and policymakers seeking to promote digitally enabled sustainability in emerging economies. Originality/value This study advances DCT by showing the nonlinear, configuration-dependent effects of digital platform capabilities on sustainability. It frames balanced integration and reconfiguration as a higher-order capability driving environmental and circular performance, offering new insights into digital transformation in emerging economies.