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Open AccessArticle

Circular Economy Innovation and Environmental Sustainability Impact on Economic Growth: An Integrated Model for Sustainable Development

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Department of Economics, Epoka University, 1032 Tirana, Albania
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Department of Business Administration, Epoka University, 1032 Tirana, Albania
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Department of Machine Design, KTH Royal Institute of Technology, Brinellvägen 83, 11428 Stockholm, Sweden
*
Author to whom correspondence should be addressed.
Sustainability 2020, 12(12), 4831; https://doi.org/10.3390/su12124831
Received: 12 May 2020 / Revised: 1 June 2020 / Accepted: 9 June 2020 / Published: 12 June 2020
This study examines the link between selected indicators of a circular economy, including essential components of environmental and economic growth. Developed economies are continuously innovating to promote growth and giving governmental support to the producers to move from linear economies to circular ones. Hence, waste materials in industrial systems are recycled or re-used, improving the efficiency of using finite resources with the no-waste approach. The aim of this paper is the following: (1) to identify the main components of a circular economy, which are also supportive of sustainability and development; (2) to check the impact of these variables in the economic growth of European Union countries; (3) to find out if the three components of sustainable development adopted to circular economy (CE) indicators (environmental–social–economic) are significant to economic growth. We used a fixed effect panel data analysis to identify the circular economy’s impact on the economic growth of European countries. Additionally, to support the results of the regression analysis, we employed a second method—generalized methods of moments—computing the Arellano–Bond dynamic panel data estimation method. The model included five independent variables, such as environmental tax rate, a recycling rate of waste, private investment and jobs in a circular economy, patents related to recycling, and trade of recyclable raw materials. The identification of each variable was made based on a deep search through literature. The results of both econometric models showed a strong and positive correlation between a circular economy to economic growth, highlighting the crucial role of sustainability, innovation, and investment in no-waste initiatives to promote wealth. View Full-Text
Keywords: circular economy; sustainability; innovation; environmental dimension; economic growth; panel data circular economy; sustainability; innovation; environmental dimension; economic growth; panel data
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Hysa, E.; Kruja, A.; Rehman, N.U.; Laurenti, R. Circular Economy Innovation and Environmental Sustainability Impact on Economic Growth: An Integrated Model for Sustainable Development. Sustainability 2020, 12, 4831.

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