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Dynamics Of Influences Between Circular Economy, Innovation And Sustainability In The European Union Using The Var Model

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  • FORTEA COSTINELA

    (DEPARTMENT OF BUSINESS ADMINISTRATION, DUNAREA DE JOS UNIVERSITY OF GALATI, ROMANIA)

  • ANTOHI VALENTIN-MARIAN

    (DEPARTMENT OF BUSINESS ADMINISTRATION, DUNAREA DE JOS UNIVERSITY OF GALATI, ROMANIA)

  • ZLATI MONICA LAURA

    (DEPARTMENT OF BUSINESS ADMINISTRATION, DUNAREA DE JOS UNIVERSITY OF GALATI, ROMANIA)

  • FIRDOUS AHMAD MALIK

    (DEPARTMENT OF MANAGEMENT , UNIVERSITY OF PEOPLE, USA)

Abstract

This study examines the dynamic relationships between the circular economy, innovation and sustainability in the European Union over the period 2014-2023, using a VAR model to analyze the interactions between municipal waste recycling rates, resource productivity, circular material use rates, environmental tax revenues and R&D expenditure. The results of this study suggest complex relationships between the circular economy, innovation and sustainability in the European Union, highlighting that policies aimed at promoting recycling practices can positively contribute to increasing the use of circular materials. This study emphasizes the importance of integrating public policies in a coherent and complementary way so that circular economy, innovation and fiscal initiatives are effectively coordinated to contribute to a sustainable and equitable transition at European level. Proposed recommendations include the development of innovation strategies that explicitly focus on increasing resource productivity, improving recycling infrastructure and harmonizing the fiscal framework between Member States to support the use of circular materials.

Suggested Citation

  • Fortea Costinela & Antohi Valentin-Marian & Zlati Monica Laura & Firdous Ahmad Malik, 2025. "Dynamics Of Influences Between Circular Economy, Innovation And Sustainability In The European Union Using The Var Model," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 3, pages 57-74, June.
    • Handle: RePEc:cbu:jrnlec:y:2025:v:3:p:57-74
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    References listed on IDEAS

    as
    1. Morelli, Giovanna & Pozzi, Cesare & Gurrieri, Antonia Rosa & Mele, Marco & Costantiello, Alberto & Magazzino, Cosimo, 2024. "The role of circular economy in EU entrepreneurship: A deep learning experiment," The Journal of Economic Asymmetries, Elsevier, vol. 30(C).
    2. E.L. Kuzma & S. Sehnem & Ana Beatriz Lopes de Sousa Jabbour & L.M.S. Campos, 2022. "Circular Economy Indicators and Levels of Innovation: An Innovative Systematic Literature Review," Post-Print hal-04276060, HAL.
    3. Nathalia Suchek & Cristina I. Fernandes & Sascha Kraus & Matthias Filser & Helena Sjögrén, 2021. "Innovation and the circular economy: A systematic literature review," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 3686-3702, December.
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