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Sustainable production: The economic returns of circular economy practices

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  • Davide Antonioli
  • Claudia Ghisetti
  • Massimiliano Mazzanti
  • Francesco Nicolli

Abstract

Assessing the economic consequences of sustainable production choices aimed at reducing negative environmental externalities is crucial for policy making, in light of the increasing interest and awareness experienced in recent EU policy packages. This assessment is one of the goals of the current work, which tries to provide new empirical evidence on the economic returns of circular economy practices, drawing on previous literature on the underlying determinants of greener production choices, which are stated to differ from standard technological innovations as they are subject to a knowledge and an environmental externality. Using an original dataset on approximately 3000 Italian manufacturing firms, we provide evidence on the relations among innovations related to the circular economy concept and economic outcome in the short run. The evidence shows that in the short run, it is difficult to obtain economic gains from circular economy related innovations when taken in isolation, especially for Small and medium‐sized enterprises (SMEs), who may also experience negative returns.

Suggested Citation

  • Davide Antonioli & Claudia Ghisetti & Massimiliano Mazzanti & Francesco Nicolli, 2022. "Sustainable production: The economic returns of circular economy practices," Business Strategy and the Environment, Wiley Blackwell, vol. 31(5), pages 2603-2617, July.
    • Handle: RePEc:bla:bstrat:v:31:y:2022:i:5:p:2603-2617
    DOI: 10.1002/bse.3046
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    2. Alessandra Neri & Marta Negri & Enrico Cagno & Vikas Kumar & Jose Arturo Garza‐Reyes, 2023. "What digital‐enabled dynamic capabilities support the circular economy? A multiple case study approach," Business Strategy and the Environment, Wiley Blackwell, vol. 32(7), pages 5083-5101, November.
    3. Liu, Yanping & Farooque, Muhammad & Lee, Chang-Hun & Gong, Yu & Zhang, Abraham, 2023. "Antecedents of circular manufacturing and its effect on environmental and financial performance: A practice-based view," International Journal of Production Economics, Elsevier, vol. 260(C).
    4. £ukasz Ma³ys, 2023. "The approach to supply chain cooperation in the implementation of sustainable development initiatives and company’s economic performance," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 18(1), pages 255-286, March.

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