Abstract
The concept of circular economy (CE) is increasingly prominent in European Union (EU) countries, considering the demand for incorporating renewable resources into end products. Similar to sustainable development dimensions, CE indicators can be classified within economic, social, and environmental protection categories, depending on their measuring scope, and within micro-, meso-, and macro-level, depending on the level of observation. The aim of the research is to determine the impact of CE innovation on CE performance in EU countries by modeling the Eurostat indicators via SmartPLS software. Relying on the relevant literature review, the paper first presents the concept of CE and the composite indicators used for evaluating its specific performances, as well as previous global and European experiences. Further, the study focuses on the modeling options for CE performance composite indicators demonstrating the relationship between the accomplishments of CE and the use of innovative measures at the level of products, services, or processes. Based on the data from EU27 countries for the period 2018–2021, the paper explores the relationship between variable and model composite indicators using SmartPLS software. SmartPLS output results support four assumption paths between CE indicator groups which are also confirmed with convergent and discriminant validity and heterotrait-monotrait ratio (HTMT) values. CE path modeling structure confirms the positive connection between CE innovations and CE performance emphasizing the need for providing a supportive environment and funds for innovations.
Similar content being viewed by others
Data availability
The data that support the findings of this study are available from the corresponding author upon reasonable request.
References
Bianchi M, Cordella M (2023) Does circular economy mitigate the extraction of natural resources? Empirical evidence based on analysis of 28 European economies over the past decade. Ecol Econom 203:107607. https://doi.org/10.1016/j.ecolecon.2022.107607
Busu M, Nedelecu AC (2017) Sustainability and economic performance of the companies in the renewable energy sector in Romania. Sustainability 10:8. https://doi.org/10.3390/su10010008
Busu M, Trica CL (2019) Sustainability of circular economy indicators and their impact on economic growth of the European Union. Sustainability 11(19):5481. https://doi.org/10.3390/su11195481
Calisto Friant M, Vermeulen WJ, Salomone R (2021) Analysing European Union circular economy policies: words versus actions. Sustain Prod Consum 27:337–353. https://doi.org/10.1016/j.spc.2020.11.001
Chan PCA, Chan PLA (2004) Key performance indicators for measuring construction success. Benchmarking: An International Journal. 11(2):203–221. https://doi.org/10.1108/14635770410532624
Chen CC, Pao HT (2022) The causal link between circular economy and economic growth in EU-25. Environ Sci Pollut Res 29(50):76352–76364. https://doi.org/10.1007/s11356-022-21010-6
CIRAIG (2015) Circular economy: a critical literature review of concepts. Centre for the Life Cycle of Products Processes and Services, Montreal. https://ciraig.org/pdf/CIRAIG_Circular_Economy_Literature_Review_Oct2015.pdf. Accessed 21 September 2022.
Circle Economy. (2022). The circularity gap report 2022 (pp. 1–64, Rep.). Amsterdam: Circle Economy. Accessed, 18 February 2023
Circle Economy (2022) The circularity gap report 2022 (pp. 1–64, Rep.). Amsterdam: Circle Economy. Accessed, 18 February 2023
Dobrota M (2015) A statistical approach to composite indicators construction based on Ivanović distance. Dissertation, University of Belgrade
Dochy FJRC, Segers MSR, Wijnen HFW (1990) Preliminaries to the implementation of a quality assurance system based on management information and performance indicators: results of a validity study. In: Dochy FJRC, Segers MSR, Wijnen HFW (ed) Management and Performance Indicators in Higher Education. Maastricht, Van Gorcum, pp 69–94
EASAC (2016) Indicators for a circular circular economy. European Academies’ Science Advisory Council. https://easac.eu/fileadmin/PDF_s/reports_statements/Circular_Economy/EASAC_Indicators_web_complete.pdf. Accessed 20 September 2022.
EC (2015) Closing the loop - an EU action plan for the circular economy.https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52015DC0614. Accessed 20 September 2022.
EC (2018a) A European strategy for plastics in a circular economy. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2018a%3A28%3AFIN. Accessed 21 September 2022.
EC (2018b) Measuring progress towards circular economy in the European Union – key indicators for a monitoring framework.https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD%3A2018b%3A17%3AFIN. Accessed 21 September 2022.
EC (2020) A new circular economy action plan for a cleaner and more competitive Europe. https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1583933814386&uri=COM:2020:98:FIN. Accessed 10 February 2023
EEA (2016) Circular economy in Europe - developing the knowledge base: report 2. European Environment Agency. https://www.eea.europa.eu/publications/circular-economy-in-europe. Accessed 20 September 2022.
Elia V, Gnoni MG, Tornese F (2017) Measuring circular economy strategies through index methods: a critical analysis. J Clean Prod 142:2741–2751. https://doi.org/10.1016/j.jclepro.2016.10.196
Eurostat (2018) Recycling rate of municipal waste (cei_wm011). https://ec.europa.eu/eurostat/cache/metadata/en/cei_wm011_esmsip2.htm#source_type1658225621594. Accessed 20 September 2022.
Eurostat (2019) Private investments, jobs and gross value added related to circular economy sectors (cei_cie010). https://ec.europa.eu/eurostat/cache/metadata/en/cei_cie010_esmsip2.htm Accessed 21 September 2022.
Eurostat (2020) Generation of municipal waste per capita (cei_pc031). https://ec.europa.eu/eurostat/cache/metadata/en/cei_pc031_esmsip2.htm Accessed 15 September 2022.
Eurostat (2021a) Resource productivity (cei_pc030). https://ec.europa.eu/eurostat/cache/metadata/en/cei_pc030_esmsip2.htm Accessed 20 September 2022.
Eurostat (2021b) Circular material use rate (cei_srm030). https://ec.europa.eu/eurostat/cache/metadata/en/cei_srm030_esmsip2.htm Accessed 20 September 2022.
Eurostat (2022a) Recycling rate of all waste excluding major mineral waste (cei_wm010). https://ec.europa.eu/eurostat/cache/metadata/en/cei_wm010_esmsip2.htm Accessed 21 September 2022a.
Eurostat (2022b) Patents related to waste management and recycling(cei_cie020). https://ec.europa.eu/eurostat/cache/metadata/en/cei_cie020_esmsip2.htm Accessed 21 September 2022b.
Ezeudu OB, Agunwamba JC, Ugochukwu UC et al (2022) Circular economy and frugal innovation: a conceptual nexus. Environ Sci Pollut Res 29:29719–29734. https://doi.org/10.1007/s11356-022-18522-6
Folan P, Browne J, Jagdev H (2015) Performance: its meaning and content for today’s business research. Comput Ind 58(7):605–620. https://doi.org/10.1016/j.compind.2007.05.002
Geissdoerfer M, Savaget P, Bocken MPN, Hultink Jan E (2017) The circular economy – a new sustainability paradigm? J Clean Prod 143:757–768. https://doi.org/10.1016/j.jclepro.2016.12.048
Geng Y, Fu J, Sarkis J, Xue B (2012) Towards a national circular economy indicator system in China: an evaluation and critical analysis. J Clean Prod 23(1):216–224. https://doi.org/10.1016/j.jclepro.2011.07.005
Geng Y, Sarkis J, Ulgiati S, Zhang P (2013) Measuring China’s circular economy. Science 339:1526–1527
Georgescu I, Kinnunen J, Androniceanu AM (2022) Empirical evidence on circular economy and economic development in Europe: a panel approach. J Business Econ Manag 23(1):199–217. https://doi.org/10.3846/jbem.2022.16050
Ghisellini P, Cialani C, Ulgiati S (2016) A review on circular economy: the expected transition to a balanced interplay of environmental and economic systems. J Clean Prod 114:11–32. https://doi.org/10.1016/j.jclepro.2015.09.007
GRI (2012) Performance indicators. Starbucks global responsibility report – goals and progress. http://globalassets.starbucks.com/assets/79decb3b5f814b8086ebfc6f137aadd1.pdf. Accessed 21 September 2022.
Hair JF, Hollingsworth CL, Randolph AB, Chong AYL (2017) An updated and expanded assessment of PLS-SEM in information systems research. Ind Manag Data Syst 117:442–458. https://doi.org/10.1108/IMDS-04-2016-0130
Hamid MRA, Sami W, Sidek M, Mohmad H (2017) Discriminant validity assessment: use of Fornell & Larcker criterion versus HTMT Criterion, J Phys: Conference Series, 890(1):012163. https://doi.org/10.1088/1742-6596/890/1/012163
Hayes AF (2018) Introduction to mediation, moderation, and conditional process analysis: a regression-based approach, 2nd edn. New York, NY, Guilford Press
Henseler J (2007) A new simple approach to multigroup analysis in partial least squares path modelling. In Proceedings of the 5th International Symposium on PLS and Related Methods (PLS’07), Oslo, Norway, 5–7 September. https://repository.ubn.ru.nl/bitstream/handle/2066/160875/160875.pdf
Heshmati A (2017) A review of the circular economy and its implementation. Int J Green Econ 11(3–4):251–288. https://doi.org/10.1504/IJGE.2017.089856
Homrich AS, Galvão G, Abadia LG, Carvalho MM (2018) The circular economy umbrella: trends and gaps on integrating pathways. J Clean Prod 175:525–543. https://doi.org/10.1016/j.jclepro.2017.11.064
Hysa E, Kruja A, Rehman NU, Laurenti R (2020) Circular economy innovation and environmental sustainability impact on economic growth: an integrated model for sustainable development. Sustainability 12(12):4831. https://doi.org/10.3390/su12124831
Iacovidou E, Hahladakis JN, Purnell P (2021) A systems thinking approach to understanding the challenges of achieving the circular economy. Environ Sci Pollut Res 28:24785–24806. https://doi.org/10.1007/s11356-020-11725-9
Iacovidou E, Velis CA, Purnell P et al (2017) Metrics for optimising the multi-dimensional value of resources recovered from waste in a circular economy: a critical review. J Clean Prod 166:910–938. https://doi.org/10.1016/j.jclepro.2017.07.100
Knäble D, de Quevedo Puente E, Pérez-Cornejo C, Baumgärtler T (2022) The impact of the circular economy on sustainable development: a European panel data approach. Sustain Prod Consum 34:233–243. https://doi.org/10.1016/j.spc.2022.09.016
Mazur-Wierzbicka E (2021) Circular economy: advancement of European Union countries. Environ Sci Eur 33:1–15. https://doi.org/10.1186/s12302-021-00549-0
Moraga G, Huysvelda S, Mathieuxc F et al (2019) Circular economy indicators: what do they measure? Resour Conserv Recycl 146:452–461. https://doi.org/10.1016/j.resconrec.2019.03.045
Ogunmakinde OE (2019) A review of circular economy development models in China, Germany and Japan. Recycl 4(3):27. https://doi.org/10.3390/recycling4030027
Pauliuk S (2018) Critical appraisal of the circular economy standard BS 8001:2017 and a dashboard of quantitative system indicators for its implementation in organizations. Resour Conserv Recycl 129:81–92. https://doi.org/10.1016/j.resconrec.2017.10.019
Popović A, Ivanović-Djukić M, Milijić A (2022) Assessment of the impact of circular economy competitiveness and innovation on European economic growth. Eur J Appl Econ 19(2):1–14. https://doi.org/10.5937/EJAE19-39057
Robaina M, Villar J, Pereira ET (2020) The determinants for a circular economy in Europe. Environ Sci Pollut Res 27:12566–12578. https://doi.org/10.1007/s11356-020-07847-9
Saidani M, Yannou B, Leroy Y, Cluzel F, Kendall A (2019) A taxonomy of circular economy indicators. J Clean Prod 207:542–559. https://doi.org/10.1016/j.jclepro.2018.10.014
Sarstedt M, Hair JF, Nitzl C, Ringle CM, Howard MC (2020) Beyond a tandem analysis of SEM and PROCESS: use of PLS-SEM for mediation analyses! Int J Mark Res 62(3):288–299. https://doi.org/10.1177/1470785320915686
UNDP (2016) Sustainable Development Goals. https://www.undp.org/sustainable-development-goals. Accessed 20 September 2022.
UNEP (2011) Decoupling natural resource use and environmental impacts from economic growth: a report of the Working Group on Decoupling to the International Resource Panel, Paris. https://www.resourcepanel.org/reports/decoupling-natural-resource-use-and-environmental-impacts-economic-growth. Accessed 20 September 2022.
UNEP (2016) Global material flows and resource productivity: assessment report for the UNEP International Resource Panel, Paris. 2016. https://www.resourcepanel.org/reports/global-material-flows-and-resource-productivity-database-link. Accessed 20 September 2022.
Vence X, Pereir A, Laperche B (2022) Overcoming the circular economy paradox through innovation: pitfalls in the transition pathways. J Innov Econ Manag 39:1–13. https://doi.org/10.3917/jie.039.0001
Vranjanac Ž (2019) Overview of indicator development in the fields of sustainable development and environmental protection. Facta Universitatis, Series: Working and Living Environmental Protection. 193–198. https://doi.org/10.22190/FUWLEP1903193V
Vranjanac Ž, Rađenović Ž (2022) EU countries hierarchical clustering towards circular economy performance indicators. Facta Universitatis, Series: Working and Living Environmental Protection, 149–155. https://doi.org/10.22190/FUWLEP2203149V
Vranjanac Ž, Vasović D, Janaćković G, Živković N, Malenović-Nikolić J (2019) Comparative analysis of selected environmental indicators within adjusted savings in Serbia and Romania. J Environ Prot Ecol 20(2):906–911
Vuţă M, Vuţă M, Enciu A, Cioacă SI (2018) Assessment of the circular economy’s impact in the EU economic growth. Amfiteatru Econ 20(48):248–261. https://doi.org/10.24818/EA/2018/48/248
Funding
This study was supported by the Ministry of Science, Technological Development and Innovation of the Republic of Serbia (Contract No. 451–03-47/2023–01/200148 and 451–03-47/2023–01/200371).
Author information
Authors and Affiliations
Contributions
Žarko Vranjanac: study conception and design, material preparation, data collection, analysis, and writing the original draft. Žarko Rađenović: study conception and design, material preparation, data collection, analysis, and writing the original draft. Tamara Rađenović: study conception and design, methodology, writing, review, and editing. Snežana Živković: study conception and design, editing, and supervision. All authors read and approved the final manuscript.
Corresponding author
Ethics declarations
Ethics approval
Not applicable.
Consent to participate
Not applicable.
Consent for publication
Not applicable.
Competing interests
The authors declare no competing interests.
Additional information
Responsible Editor: Philippe Garrigues
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Vranjanac, Ž., Rađenović, Ž., Rađenović, T. et al. Modeling circular economy innovation and performance indicators in European Union countries. Environ Sci Pollut Res 30, 81573–81584 (2023). https://doi.org/10.1007/s11356-023-26431-5
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11356-023-26431-5