The nexus of environmental innovation and circularity: Evidence from European economies

Abstract

This paper shows the importance of environmental innovation on the circularity performance of each country that creates favorable conditions to help countries move towards the circular economy. Six measures are used to reflect environmental innovation, including the percentage of enterprises that invest in environmental innovation, the percentage of enterprises implementing environmental innovation activities, the number of ISO 14001 certificates, patents related to environmental innovation, the total R&D personnel and researchers, and the amount of green early-stage investments. We provide empirical evidence that innovation in environmental activities is crucial for an economy’s circularity performance, especially in the long term. Environmental innovation is also an essential enable of circularity.