Digital Innovation Capability and Innovation-Driven Compliance for Supply Chain Resilience: Evidence from Thailand’s Plastic Recycling Industry

This study investigates how regulatory pressure and organizational capabilities influence innovation-enabled compliance and supply chain performance in Thailand’s plastic recycling sector. Drawing on institutional theory, the resource-based view, and dynamic capability perspectives, the study develops and empirically tests a conceptual model using partial least squares structural equation modeling (PLS-SEM). Data were collected from 300 respondents across 20 plastic recycling facilities in the Bangkok Metropolitan Region. The results show that Digital Innovation Capability (DIC) is the strongest predictor of legal compliance behavior (LCB), followed by Organizational Regulatory Readiness (ORR), Regulatory Enforcement Intensity (REI), and Compliance Process Maturity (CPM). In turn, LCB significantly enhances supply chain resilience (SCR). The findings further indicate that REI exerts both direct and indirect effects on SCR through LCB. Although REI demonstrates a significant direct effect on SCR, the indirect effect through LCB is comparatively weaker than that of Digital Innovation Capability (DIC). Nevertheless, the mediation effect remains supported based on bootstrapped confidence interval analysis. These findings suggest that regulatory pressure alone may encourage compliance at a formal level, but sustainable operational performance ultimately depends on the development of internal organizational and technological capabilities. Mediation analysis further confirms that LCB serves as a key mechanism linking organizational and technological capabilities to supply chain performance. Overall, the findings position compliance as an innovation-enabled and capability-driven mechanism that supports digital transformation, operational resilience, and sustainability within the circular economy.