Innovation as a Driver of Growth in the Context of Circular Economy and Green Management
Keywords:
Circular Economy, Green Management, InnovationAbstract
The circular economy represents a transformative shift away from the linear production and consumption patterns that have prevailed since the Industrial Revolution. This concept emerged in response to the realization that natural resources are finite and that waste generation carries significant environmental and economic costs—assumptions often overlooked by the linear economic model. Instead, the circular economy advocates for reducing dependency on natural resources while fostering a self-sustaining economic system through a closed-loop approach. The circular economy is rooted in the principles of sustainable development, focusing on redesigning the procurement processes for goods and services within the economy. In contrast, green management emphasizes integrating environmental considerations throughout the entire business lifecycle, from sourcing raw materials to post-sale activities, ensuring sustainability at every stage. Businesses of all sizes must adopt an environmentally conscious approach to create meaningful ecological impacts. This study examines how circular economy and green management practices influence a firm's growth performance through the lens of innovation. The analysis reveals that innovation significantly enhances a firm's growth performance, whereas the impact of green management is comparatively limited. Interestingly, the circular economy was found to have neither a positive nor a negative effect on the firm's growth performance.