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Assessment of the Circular Economy’s Impact in the EU Economic Growth

Author

Listed:
  • Mariana Vu?a

    (Bucharest University of Economic Studies and Institute of Financial Studies, Romania)

  • Mihai Vuta

    (Bucharest University of Economic Studies and Institute of Financial Studies, Romania)

  • Adrian Enciu

    (Bucharest University of Economic Studies and Institute of Financial Studies, Romania)

  • Sorin-Iulian Cioaca

    (Bucharest University of Economic Studies and Institute of Financial Studies, Romania)

Abstract

Starting from the significant differences between the European Union’s member states regarding framing and implementing the sustainable development strategies and the transition from linear economy towards circular economy (European Commission, 2017a), the article analyses the impact that circular economy indicators, such as the recycling rate of municipal waste, packaging waste and bio-waste, the expenditure on research and development to find solutions to extend the life cycle of materials and reusing waste, as well as the environmental taxes have on the resource productivity and real economic growth. Using these correlations, we consider that the transition from the linear economic model to the circular economic model has positive effects, as proven by this study. The proposed model uses data for the 28 member states of the European Union, in the 2005-2016 time frame. The novelty of this study lies in using a data panel model for estimating the impact that the measures associated with the circular economy have on the resource productivity and economic growth. The obtained results show that the resource productivity improves by 0.01307 considering one percent increase in the recycling rate of the municipal waste, by 0.159988 if the research and innovation as percentage in the GDP increases by one percent and by 0.068711 when the number of patents in the EU (as for 1 million inhabitants) increases by one unit. All these values stress out the positive effects the circular economy model may have on the society’s sustainable development.

Suggested Citation

  • Mariana Vu?a & Mihai Vuta & Adrian Enciu & Sorin-Iulian Cioaca, 2018. "Assessment of the Circular Economy’s Impact in the EU Economic Growth," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 20(48), pages 248-248.
    • Handle: RePEc:aes:amfeco:v:20:y:2018:i:48:p:248
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    Citations

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    Cited by:

    1. Bernadeta Baran, 2020. "Plastic waste as a challenge for sustainable development and circularity in the European Union," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 19(1), pages 7-20, March.
    2. Gonca Yılmaz, 2023. "Which Factors Drive The Resource Efficiency in Circular Economy? A Panel Data Regression Analysis," EKOIST Journal of Econometrics and Statistics, Istanbul University, Faculty of Economics, vol. 0(38), pages 19-34, June.
    3. Sonia Herrero-Luna & Marta Ferrer-Serrano & María Pilar Latorre-Martínez, 2022. "Circular Economy and Innovation: A Systematic Literature Review," Central European Business Review, Prague University of Economics and Business, vol. 2022(1), pages 65-84.
    4. Nicolae Pintilie, 2021. "A Review Of Europe’S Transition From Fossil Fuels To Renewable Energy Using Circular Economy Principles," Business Excellence and Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 11(2), pages 95-107, June.
    5. Bernadeta Baran, 2019. "The Circular Economy in EU Policy as a Response to Contemporary Ecological Challenges," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 4, pages 31-51.
    6. Codruța Cornelia Dura & Ana Maria Mihaela Iordache & Alexandru Ionescu & Claudia Isac & Teodora Odett Breaz, 2022. "Analyzing Performance in Wholesale Trade Romanian SMEs: Framing Circular Economy Business Scenarios," Sustainability, MDPI, vol. 14(9), pages 1-34, May.
    7. Andreea Stoican, 2020. "The natural environment. The development of an institutional protection framework - a permanent concern of the European Union," Juridical Tribune (Tribuna Juridica), Bucharest Academy of Economic Studies, Law Department, vol. 10(1), pages 94-101, March.
    8. Carmen Lenuta Trica & Cristian Silviu Banacu & Mihail Busu, 2019. "Environmental Factors and Sustainability of the Circular Economy Model at the European Union Level," Sustainability, MDPI, vol. 11(4), pages 1-16, February.
    9. Oana Dobre-Baron & Alina Nițescu & Dorina Niță & Cătălin Mitran, 2022. "Romania’s Perspectives on the Transition to the Circular Economy in an EU Context," Sustainability, MDPI, vol. 14(9), pages 1-26, April.
    10. Vasile Dinu & Giani Ionel Gradinaru & Alin Cristian Maricut & Bogdan Florin Matei, 2023. "The Role of Innovation and New Technologies in Closing the Economic Circuit of Electrical and Electronic Equipment," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 25(62), pages 1-12, February.
    11. Sabina Scarpellini, 2022. "Social impacts of a circular business model: An approach from a sustainability accounting and reporting perspective," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(3), pages 646-656, May.
    12. Vítor Domingues Martinho & Paulo Reis Mourão, 2020. "Circular Economy and Economic Development in the European Union: A Review and Bibliometric Analysis," Sustainability, MDPI, vol. 12(18), pages 1-25, September.
    13. Felix H. Arion & Vardan Aleksanyan & Davit Markosyan & Iulia Diana Arion, 2023. "Circular Pathways to Sustainable Development: Understanding the Links between Circular Economy Indicators, Economic Growth, Social Well-Being, and Environmental Performance in EU-27," Sustainability, MDPI, vol. 15(24), pages 1-16, December.
    14. Tihana Škrinjarić, 2021. "Ranking Environmental Aspects of Sustainable Tourism: Case of Selected European Countries," Sustainability, MDPI, vol. 13(10), pages 1-19, May.
    15. Yuan Huang & Mahmood Shafiee & Fiona Charnley & Adriana Encinas-Oropesa, 2022. "Designing a Framework for Materials Flow by Integrating Circular Economy Principles with End-of-Life Management Strategies," Sustainability, MDPI, vol. 14(7), pages 1-20, April.

    More about this item

    Keywords

    circular economy; economic growth; sustainable development; research and innovation.;
    All these keywords.

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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