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Sustainability 2018, 10(8), 2799; https://doi.org/10.3390/su10082799

A Definition and Theoretical Review of the Circular Economy, Value Creation, and Sustainable Business Models: Where Are We Now and Where Should Research Move in the Future?

1
Department of Management and Organisation, Hanken School of Economics, 65101 Vaasa, Finland
2
Department of Management and Organisation, Hanken School of Economics, 00101 Helsinki, Finland
3
Department of Business Administration, Technology and Social Sciences, Luleå University of Technology, 97187 Luleå, Sweden
4
Institute of Technology Management, Global Center for Entrepreneurship & Innovation, University of St. Gallen, 9000 St. Gallen, Switzerland
5
Department of Management, University of Vaasa, 65200 Vaasa, Finland
*
Author to whom correspondence should be addressed.
Received: 27 June 2018 / Revised: 25 July 2018 / Accepted: 3 August 2018 / Published: 7 August 2018
(This article belongs to the Special Issue Sustainable Innovation in Organizations for Improving Decisions)
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Abstract

This paper contains a theory review of value creation and the implementation of next-generation sustainable business models to profit in the circular economy. While previous research has pointed to the influence of society and regulatory policy on companies’ ability to address larger sustainability concerns and to change their ways of working, the field suffers from little theoretical guidance outlining how undertake circular business mode transformation in practice. By reviewing the field’s main theories, we illustrate significant implications for how future research can study profitability and competitiveness in the circular economy. This paper introduces the central components of circular business models and discusses links to contingency theory, transaction cost theory, resource-based theory, theory on networks and industrial economics, and agency theory. Understanding the circular economy and the ways companies can compete in the circular economy based on these theories is important for establishing important new research directions for scholars of sustainable business and circular business models. View Full-Text
Keywords: circular economy; review; definition; sustainability; business models; value creation; future research circular economy; review; definition; sustainability; business models; value creation; future research
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).
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Lahti, T.; Wincent, J.; Parida, V. A Definition and Theoretical Review of the Circular Economy, Value Creation, and Sustainable Business Models: Where Are We Now and Where Should Research Move in the Future? Sustainability 2018, 10, 2799.

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