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Circular economy innovations, growth and employment at the firm level: Empirical evidence from Germany

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  • Jens Horbach
  • Christian Rammer

Abstract

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.

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  • Jens Horbach & Christian Rammer, 2020. "Circular economy innovations, growth and employment at the firm level: Empirical evidence from Germany," Journal of Industrial Ecology, Yale University, vol. 24(3), pages 615-625, June.
    • Handle: RePEc:bla:inecol:v:24:y:2020:i:3:p:615-625
    DOI: 10.1111/jiec.12977
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    Cited by:

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    2. 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.
    3. Surajit Bag & Muhammad Sabbir Rahman & Gautam Srivastava & Peter Kilbourn & Nishikant Mishra, 2024. "Buyer–supplier partnerships and circular economy performance in food supply chains: Serial mediation by commitment contract and innovation performance," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 1247-1264, February.
    4. Ayesha Afzal & Saba Fazal Firdousi & Ayma Waqar & Minahil Awais, 2022. "The Influence of Internet Penetration on Poverty and Income Inequality," SAGE Open, , vol. 12(3), pages 21582440221, August.
    5. Davide Antonioli & Claudia Ghisetti & Massimiliano Mazzanti & Francesco Nicolli, 2022. "The economic returns of circular economy practices," Working Papers 2022.05, Fondazione Eni Enrico Mattei.
    6. Corinna Vera Hedwig Schmidt & Bastian Kindermann & Cassian Felix Behlau & Tessa Christina Flatten, 2021. "Understanding the effect of market orientation on circular economy practices: The mediating role of closed‐loop orientation in German SMEs," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 4171-4187, December.
    7. Massimiliano Mazzanti & Francesco Nicolli & Stefano Pareglio & Marco Quatrosi, 2022. "Adoption of Eco and Circular Economy-Innovation in Italy: exploring different firm profiles," Working Papers 2022.06, Fondazione Eni Enrico Mattei.
    8. Ana de Jesus & Minna Lammi & Teresa Domenech & Fedra Vanhuyse & Sandro Mendonça, 2021. "Eco-Innovation Diversity in a Circular Economy: Towards Circular Innovation Studies," Sustainability, MDPI, vol. 13(19), pages 1-22, October.
    9. Bettina Becker, 2023. "Green Innovation Strategies, Innovation Success, and Firm Performance—Evidence from a Panel of Spanish Firms," Sustainability, MDPI, vol. 15(2), pages 1-11, January.
    10. Olga Zakharova & Anna Glazkova & Lyudmila Suvorova, 2023. "Online Equipment Repair Community in Russia: Searching for Environmental Discourse," Sustainability, MDPI, vol. 15(17), pages 1-16, August.
    11. Carina Pasqualotto & Daniela Callegaro-De-Menezes & Cornelius Stephanus Lodewyk Schutte, 2023. "An Overview and Categorization of the Drivers and Barriers to the Adoption of the Circular Economy: A Systematic Literature Review," Sustainability, MDPI, vol. 15(13), pages 1-24, July.
    12. Li, Huilong & Wei, Xinyuan & Gao, Xinyu, 2021. "Objectives setting and instruments selection of circular economy policy in China's mining industry: A textual analysis," Resources Policy, Elsevier, vol. 74(C).
    13. Quatraro, Francesco & Ricci, Andrea, 2023. "Heterogeneity of Green Expenditure, Firms’ Performances and Wages: Italian Evidence on Circular Economy, Resource-saving and Energy Efficiency Investments," Department of Economics and Statistics Cognetti de Martiis. Working Papers 202321, University of Turin.
    14. Viktor Koval & Piotr Olczak & Mira Hakova & Mykhailo Bilyi & Dmitry Kretov & Olga Laktionova, 2023. "Analysis of Financial Outsourcing Management in Regional Environmental Systems," Sustainability, MDPI, vol. 15(15), pages 1-24, August.
    15. Alessio Miatto & Nargessadat Emami & Kylie Goodwin & James West & Mohammad Sadegh Taskhiri & Thomas Wiedmann & Heinz Schandl, 2024. "Australia's circular economy metrics and indicators," Journal of Industrial Ecology, Yale University, vol. 28(2), pages 216-231, April.
    16. Francesca Bassi & Mariangela Guidolin, 2021. "Resource Efficiency and Circular Economy in European SMEs: Investigating the Role of Green Jobs and Skills," Sustainability, MDPI, vol. 13(21), pages 1-21, November.
    17. Elżbieta Sobczak & Dariusz Głuszczuk & Andrzej Raszkowski, 2022. "Eco-Innovation and Innovation Level of the Economy as a Basis for the Typology of the EU Countries," IJERPH, MDPI, vol. 19(4), pages 1-17, February.
    18. Meili, Rahel & Stucki, Tobias, 2023. "Money matters: The role of money as a regional and corporate financial resource for circular economy transition at firm-level," Research Policy, Elsevier, vol. 52(10).
    19. Elżbieta Sobczak & Dariusz Głuszczuk, 2022. "Diversification of Eco-Innovation and Innovation Activity of Small and Medium-Sized Enterprises in the European Union Countries," Sustainability, MDPI, vol. 14(4), pages 1-19, February.
    20. Aurore Darmandieu & Concepción Garcés‐Ayerbe & Antoine Renucci & Pilar Rivera‐Torres, 2022. "How does it pay to be circular in production processes? Eco‐innovativeness and green jobs as moderators of a cost‐efficiency advantage in European small and medium enterprises," Business Strategy and the Environment, Wiley Blackwell, vol. 31(3), pages 1184-1203, March.

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