From Linear to Circular: Assessing the Influence of Circular Economy Practices on Business and Environmental Dynamics

Abstract

We are living in an era of transition from linear to circular modeling, where resources are reused and recycled, which helps to protect the environment. Therefore, the aim of this study is to investigate the impact of circular economy practices on corporate performance and environmental challenges. To evaluate the said narrative, we collect data from World Development Indicators. The sample of the study consists of 25 countries with a 20-year time frame (2000–2020). The regression estimates provide significant results and support our narrative that circular economy practices enhance corporate performance and improve the environment. The said findings are further robustly checked by using alternate proxies for the circular economy, corporate performance, and environment. These results propose that circular economy practices help to decrease costs, increase profits, initiate recycling, control pollution, manage waste, and thus contribute to enhancing corporate performance and providing positive environmental outcomes. These findings are useful for policymakers, academics, and practitioners. The said stakeholders can use these findings to formulate effective policies that encourage businesses to adopt circular economy practices, thus contributing to sustainable development goals.