ABSTRACT Sustainability is a major requirement in resource‐intensive industries, and the proposed study seeks to understand the role of different leadership orientations and government policy in green supply chain adoption (GSCA) and circular economy practices (CEP) in the Chinese furniture industry. The study conceptualizes the concepts of corporate social responsibility (CSR) leadership, ethical leadership, green transformational leadership and digital leadership as internal drivers and government policy as an external institutional driver, using Upper Echelon Theory and Institutional Theory. GSCA is considered a key mediator variable, and government policy is also a moderator. The sample involved 447 managers and senior employees and was analyzed using partial least‐squares structural equation modeling (PLS‐SEM). Empirical results show that each of the leadership orientations has a strong positive impact on both GSCA and CEP; government policy has a direct positive impact on GSCA and has a significant amplification effect on ethical leadership, digital leadership and green transformational leadership. Furthermore, GSCA mediates the interaction of leadership orientations and government policy into circular economy results, thus proving that effective leaders and enabling institutional governance enhance the speed of sustainability transitions. The research also contributes to the literature by applying the theories of the Upper Echelon and Institutional to the realm of resource‐heavy industries and provides practical advice to managers and policymakers seeking to facilitate the implementation of circular economy projects.
Ting Ye (2026) studied this question.