IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v241y2026ics0921800925003453.html

“Local Heroes”: Construction firms pioneering circular innovation

Author

Listed:
  • Chioatto, Elisa
  • Montanaro, Alessandro
  • Mazzanti, Massimiliano

Abstract

Innovation in the construction sector is critical to reducing environmental impacts, yet the adoption of circular innovations remains poorly understood. This paper examines the determinants of circular innovation adoption among 376 construction firms in the Emilia-Romagna region of Italy, based on an original survey dataset. Our analysis reveals that R&D investments increase the likelihood of circular innovation adoption by 24 percentage points, while larger firm size raises it by 13 points. Local market orientation exerts a strong positive effect: firms generating at least 50 % of their turnover locally are 15 percentage points more likely to adopt a circular innovation. Regulatory factors are not significant in aggregate, but become decisive for specific circular practices such as selective demolition and the use of sustainable inputs. Theoretically, the study demonstrates that circular innovations follow different adoption dynamics than traditional innovations in the construction industry, with proximity-based networks and local material flows playing a central role. Policy-wise, findings highlight the need to support R&D, especially in smaller firms, strengthen targeted regulatory incentives, and foster local inter-firm collaborations to reduce transaction costs and overcome secondary material quality risks.

Suggested Citation

  • Chioatto, Elisa & Montanaro, Alessandro & Mazzanti, Massimiliano, 2026. "“Local Heroes”: Construction firms pioneering circular innovation," Ecological Economics, Elsevier, vol. 241(C).
    • Handle: RePEc:eee:ecolec:v:241:y:2026:i:c:s0921800925003453
    DOI: 10.1016/j.ecolecon.2025.108862
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0921800925003453
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ecolecon.2025.108862?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Hossain, Md. Uzzal & Ng, S. Thomas & Antwi-Afari, Prince & Amor, Ben, 2020. "Circular economy and the construction industry: Existing trends, challenges and prospective framework for sustainable construction," Renewable and Sustainable Energy Reviews, Elsevier, vol. 130(C).
    2. Cainelli, Giulio & D’Amato, Alessio & Mazzanti, Massimiliano, 2020. "Resource efficient eco-innovations for a circular economy: Evidence from EU firms," Research Policy, Elsevier, vol. 49(1).
    3. Wagner, Marcus, 2007. "On the relationship between environmental management, environmental innovation and patenting: Evidence from German manufacturing firms," Research Policy, Elsevier, vol. 36(10), pages 1587-1602, December.
    4. Toke Reichstein & Ammon Salter & David Gann, 2008. "Break on Through: Sources and Determinants of Product and Process Innovation among UK Construction Firms," Industry and Innovation, Taylor & Francis Journals, vol. 15(6), pages 601-625.
    5. Sébastien Bourdin & André Torre, 2025. "Economic geography’s contribution to understanding the circular economy," Journal of Economic Geography, Oxford University Press, vol. 25(2), pages 293-308.
    6. Christoph P. Kiefer & Pablo del Río & Javier Carrillo‐Hermosilla, 2021. "On the contribution of eco‐innovation features to a circular economy: A microlevel quantitative approach," Business Strategy and the Environment, Wiley Blackwell, vol. 30(4), pages 1531-1547, May.
    7. Elisa Chioatto & Emy Zecca & Alessio D’Amato, 2024. "Which innovations for Circular Business Models? A product life-cycle categorisation," Industry and Innovation, Taylor & Francis Journals, vol. 31(7), pages 809-831, August.
    8. Demirel, Pelin & Kesidou, Effie, 2011. "Stimulating different types of eco-innovation in the UK: Government policies and firm motivations," Ecological Economics, Elsevier, vol. 70(8), pages 1546-1557, June.
    9. Carlos Tapia & Marco Bianchi & Georg Pallaske & Andrea M. Bassi, 2021. "Towards a territorial definition of a circular economy: exploring the role of territorial factors in closed-loop systems," European Planning Studies, Taylor & Francis Journals, vol. 29(8), pages 1438-1457, August.
    10. DAMGAARD Anders & LODATO Concetta & BUTERA Stefania & FRUERGAARD ASTRUP Thilde & KAMPS Martijn & CORBIN Liz & TONINI Davide & ASTRUP Thomas Fruergaard, 2022. "Background data collection and life cycle assessment for construction and demolition waste (CDW) management," JRC Research Reports JRC130992, Joint Research Centre.
    11. Mateusz Wielopolski & Willem Bulthuis, 2023. "The Better Building Initiative — a Collaborative Ecosystem Involving All Stakeholders as Catalyst to Accelerate the Adoption of Circular Economy Innovations in the Construction Sector," Circular Economy and Sustainability, Springer, vol. 3(2), pages 719-733, June.
    12. Sebastian Losacker & Hendrik Hansmeier & Jens Horbach & Ingo Liefner, 2023. "The geography of environmental innovation: a critical review and agenda for future research," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 43(2), pages 291-316, August.
    13. David A. Ness & Ke Xing, 2017. "Toward a Resource-Efficient Built Environment: A Literature Review and Conceptual Model," Journal of Industrial Ecology, Yale University, vol. 21(3), pages 572-592, June.
    14. Rahel Meili & Tobias Stucki & Ingrid Kissling-Näf, 2024. "Learning from the best: how regional knowledge stimulates circular economy transition at company level," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 17(3), pages 623-635.
    15. Pierre-Alexandre Balland & Ron Boschma & Joan Crespo & David L. Rigby, 2019. "Smart specialization policy in the European Union: relatedness, knowledge complexity and regional diversification," Regional Studies, Taylor & Francis Journals, vol. 53(9), pages 1252-1268, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Elisa Chioatto, 2025. "What do circular innovator firms look like in Emilia- Romagna? A cluster analysis of firms innovating in the circular economy," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 42(2), pages 405-440, July.
    2. Chioatto, Elisa & Davide, Antonioli & Mancinelli, Susanna & Nicolli, Francesco, 2025. "Do firms consider their peers when going circular? Social norms among Italian firms in circular innovation adoption," Ecological Economics, Elsevier, vol. 237(C).
    3. Durán-Romero, Gemma & López, Ana M. & Beliaeva, Tatiana & Ferasso, Marcos & Garonne, Christophe & Jones, Paul, 2020. "Bridging the gap between circular economy and climate change mitigation policies through eco-innovations and Quintuple Helix Model," Technological Forecasting and Social Change, Elsevier, vol. 160(C).
    4. Justin Doran & Geraldine Ryan, 2016. "The Importance of the Diverse Drivers and Types of Environmental Innovation for Firm Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 25(2), pages 102-119, February.
    5. Pereira, Ángeles & Vence, Xavier, 2012. "Key business factors for eco-innovation: an overview of recent firm-level empirical studies," Cuadernos de Gestión, Universidad del País Vasco - Instituto de Economía Aplicada a la Empresa (IEAE).
    6. Qi, Xiulin & Wu, Zhifang & Xu, Jinqing & Shan, Biaoan, 2023. "Environmental justice and green innovation: A quasi-natural experiment based on the establishment of environmental courts in China," Ecological Economics, Elsevier, vol. 205(C).
    7. Ying, Ying & Wang, Shixiang & Liu, Yang, 2022. "Make bricks without straw: Eco-innovation for resource-constrained firms in emerging markets," Technovation, Elsevier, vol. 114(C).
    8. Dewick, Paul & Maytorena-Sanchez, Eunice & Winch, Graham, 2019. "Regulation and regenerative eco-innovation: the case of extracted materials in the UK," Ecological Economics, Elsevier, vol. 160(C), pages 38-51.
    9. Brian Chi-ang Lin & Siqi Zheng & Nicolò Barbieri & Claudia Ghisetti & Marianna Gilli & Giovanni Marin & Francesco Nicolli, 2016. "A Survey Of The Literature On Environmental Innovation Based On Main Path Analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 30(3), pages 596-623, July.
    10. Quatraro, Francesco & Scandura, Alessandra, 2019. "Academic Inventors and the Antecedents of Green Technologies. A Regional Analysis of Italian Patent Data," Ecological Economics, Elsevier, vol. 156(C), pages 247-263.
    11. Costantini, Valeria & Crespi, Francesco & Palma, Alessandro, 2017. "Characterizing the policy mix and its impact on eco-innovation: A patent analysis of energy-efficient technologies," Research Policy, Elsevier, vol. 46(4), pages 799-819.
    12. Marzucchi, Alberto & Montresor, Sandro, 2017. "Forms of knowledge and eco-innovation modes: Evidence from Spanish manufacturing firms," Ecological Economics, Elsevier, vol. 131(C), pages 208-221.
    13. Triguero, A. & Córcoles, D., 2025. "Leveraging eco-innovation and market knowledge for a circular economy transition: Insights from Spanish manufacturing firms," Technological Forecasting and Social Change, Elsevier, vol. 216(C).
    14. Tariq, Adeel & Badir, Yuosre F. & Tariq, Waqas & Bhutta, Umair Saeed, 2017. "Drivers and consequences of green product and process innovation: A systematic review, conceptual framework, and future outlook," Technology in Society, Elsevier, vol. 51(C), pages 8-23.
    15. Fabio Montobbio & Ilaria Solito, 2018. "Does the Eco‐Management and Audit Scheme Foster Innovation in European Firms?," Business Strategy and the Environment, Wiley Blackwell, vol. 27(1), pages 82-99, January.
    16. Muscio, Alessandro & Nardone, Gianluca & Stasi, Antonio, 2013. "Drivers of Eco-Innovation in the Italian Wine Industry," 2013 International European Forum, February 18-22, 2013, Innsbruck-Igls, Austria 164752, International European Forum on System Dynamics and Innovation in Food Networks.
    17. Pilar Portillo-Tarragona & Sabina Scarpellini & Jose M. Moneva & Jesus Valero-Gil & Alfonso Aranda-Usón, 2018. "Classification and Measurement of the Firms’ Resources and Capabilities Applied to Eco-Innovation Projects from a Resource-Based View Perspective," Sustainability, MDPI, vol. 10(9), pages 1-23, September.
    18. Meleddu, Marta & Vecco, Marilena & Mazzanti, Massimiliano, 2024. "The Role of Voluntary Environmental Policies Towards Achieving Circularity," Ecological Economics, Elsevier, vol. 219(C).
    19. Carlo Corradini, 2019. "Location determinants of green technological entry: evidence from European regions," Small Business Economics, Springer, vol. 52(4), pages 845-858, April.
    20. Pereira, Vijay & Nair, Asha KS. & Bhattacharyya, Som Sekhar, 2025. "Exploring and investigating the complementarity and multidimensionality of innovation for sustainability research: Past present and future," Technovation, Elsevier, vol. 139(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:241:y:2026:i:c:s0921800925003453. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.