Search

Circular economy (CE) describes a concept that aims at saving resources by minimizing the use of material and energy over the entire life‐cycle of products, including production and repair, as well as reuse and recycling. CE innovations help to realize the goals of sustainable development by targeting environmental, economic, and social dimensions of sustainability. This paper looks at the economic and social dimensions by investigating whether firms with CE innovations perform better or worse in terms of sales growth and employment. Our econometric analysis uses data from two waves of the German part of the Community Innovation Survey. Quantile regressions show that CE innovations are positively linked to turnover and employment growth. While there is no statistically significant impact on labor productivity, at the same time, firms with CE innovations show a significantly better financial standing. [ABSTRACT FROM AUTHOR]

Governments at the EU and the member state level are placing increased emphasis on public research and development (R&D) for energy and the environment to advance a circular economy (CE). To achieve CE goals, it is critical to engage SMEs as they represent the vast majority of enterprises in the EU. To date, there is a lack of evidence regarding the impact of these public R&D investments on SMEs' CE activities. We address this gap by analysing the impact of public environmental and energy R&D on CE implementation and investment by SMEs. The study draws from a multi-level database of 10,618 SMEs across 28 EU member states for the period 2013–2015 from the Flash Eurobarometer 441 survey and country-level data from other EU sources. Employing a mixed-level probit regression, we find that the knowledge generated by public environmental and energy R&D, defined as country-level investments in this activity from 2004 to 2015, positively affects SMEs' implementation of CE activities. Additionally, the study finds that public environmental and energy R&D affects the level of SMEs' investment in CE activities negatively, suggesting that more public R&D can substitute for the financial efforts that SMEs have to take when implementing CE activities. [ABSTRACT FROM AUTHOR]