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Circular Economy in European Countries: The Required Link for Green Foreign Financing Investment Policy

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  • Le Thanh Ha

    (National Economics University)

Abstract

Green foreign financing policy (GFFP) is a critical factor in accelerating the shift to a resource-saving society and promoting the long-term growth of the national economy on the path toward the circular economy (CE). This paper attempts to investigate the experimental influences of GFFP on CE. We are employing various econometric techniques in a worldwide sample between 2014 and 2022. The estimated results show that the extent of GFFP has a significant effect on promoting the circular economy. We found strong results using different econometric techniques and including more explanatory variables. To clarify the relationship between GFFP and variables, we show the short- and long-term impacts of GFFP on the circular economy and compare GFFP with it. The results show that CE relationships are more likely to persist for long periods. Notably, we also found significant and consistent effects of GFFP on four alternative measures of CE, including related patent numbers (CE_PA), use of circulating materials (CE_MA), waste recycling (CE_RW), and biowaste recycling (CE_RB).

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  • Le Thanh Ha, 2025. "Circular Economy in European Countries: The Required Link for Green Foreign Financing Investment Policy," Circular Economy and Sustainability, Springer, vol. 5(3), pages 1727-1756, June.
    • Handle: RePEc:spr:circec:v:5:y:2025:i:3:d:10.1007_s43615-024-00494-z
    DOI: 10.1007/s43615-024-00494-z
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    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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