The use of circular economy practices in SMEs across the EU

Abstract

This study explores the circular economy (CE) practices of Small and Medium Enterprises (SMEs) in the 28 European Union (EU) member states. Five measures of CE are studied, namely Re-planning the way water is used to minimize usage and maximize re-usage, Using renewable energy, Replanning energy usage to minimize consumption, Minimizing waste by recycling or reusing waste or selling it to another firm, and Redesigning products and services to minimize the use of materials or using recycled materials. Multilevel ordinal probit models that control within-and betweenvariability across European Union countries are estimated. Results show that CE measures across EU countries are very heterogeneous. At the firm level, we find that firm size (number of employees and total turnover in 2015) and percentage of firms' turnover invested in R&D in 2015 are significant in explaining within-country variations. The multilevel structure (between-country variability) accounts for 6.1% to 15.1% of the total variability of CE measures. These results have implications for the design of framework policies at EU level given that the firms surveyed are SMEs, the segment in which these CE measures most need improved planning and implementation.

The Effect of Phases of the Adoption of the Circular Economy on Firm Performance: Evidence from 28 EU Countries

“…The survey was done to analyse firms' investment in the circular economy, firms' awareness of available financial sources related to the circular economy investment, the most used finance sources, the quality of information accessible to help firms to access finance, various issues associated with undertaking actions concerning the circular economy, and firms' knowledge of government programs that actions associated to the circular economy. These data have been used by a large number of scholars [6,8,14,49]. For instance, using the same data, [6] explored firm's characteristics that determine the CE practices while [49] contributed to the understanding of the circular economy, of its different dimensions, and the difficulties experienced by SMEs.…”

“…These data have been used by a large number of scholars [6,8,14,49]. For instance, using the same data, [6] explored firm's characteristics that determine the CE practices while [49] contributed to the understanding of the circular economy, of its different dimensions, and the difficulties experienced by SMEs. In [8], the effect of the circular eco-innovations and external funding available for the CE activities on the growth of European SMEs was examined.…”

“…In line with previous scholars [6,16,26,41,52,53], we used several control variables. Firstly, as stressed in [54], older firms are less keen to adopt innovation-oriented activities due to organisational inertia.…”

“…In reality, it is a fast-growing concept in which the value of products, materials, and resources is preserved as much as possible, while the waste production is minimised [4]. As argued by several scholars [5,6], the circular economy is grounded on the 3R approach: reducing, reusing, and recycling. What is more, Chine is the first country to have adopted the CE promotional law which applies the 3R principles.…”

“…Although there have been considerable analyses that have discussed the advantages associated with the adoption of the circular economy, there has been surprisingly little empirical research that has determined the link between the circular economy and firm performance [8]. In most studies, the emphasis was on determinants and obstacles of the circular economy implementation [1,6,19,20]. For instance, [1] distinguished between soft and hard drivers/barriers associated to the CE.…”