Leveraging the circular economy: Investment and innovation as drivers

Published in Journal of Cleaner Production, 2022

Recommended citation: Lehmann, C., Cruz-Jesus, F., Oliveira, T., & Damásio, B. (2022). Leveraging the circular economy: Investment and innovation as drivers. Journal of Cleaner Production, 132146. https://doi.org/10.1016/j.jclepro.2022.132146

Abstract: The circular economy plays a central role in Europe’s new agenda for sustainable economic growth. Using Eurostat and United Nations data from 28 European countries pertaining to the years between 2011 and 2017 we identified two underlying dimensions of the circular economy — environmental degradation and resource efficiency. Then, using dynamic panel models we assessed the impact that investment, human capital, innovation, and previous circularity levels have on each dimension of the circular economy identified, comparing their impacts on both. Our substantive findings demonstrate that innovation and investment significantly reduce environmental degradation, whereas only investment is also significant in promoting resource efficiency. Furthermore, our study suggests that circular economy levels have an inter-annual dependence.