Institutional determinants of circular economy

Abstract

Motivation: In the context of circular transition, a novel and significant area of research is the role of institutional determinants. This study is of paramount importance as it aims to fill the gap in understanding how institutions influence the implementation of circular economy (CE) in companies. By adopting an institutional approach, we can comprehensively consider the role of diverse factors, merging the realms of regulation (formal institutions) and actors' attitudes (informal institutions).

Aim: The study aims to assess the role of institutional factors in the circular transition and provide valuable insights that can significantly guide future strategies and policies for the circular economy. This research has the potential to inspire significant changes and guide us towards a more sustainable development.

Results: The study confirms that vital institutional determinants can be identified, encompassing formal and informal institutions. The analysis underscores the urgent necessity for adjustments in both areas to support the transition. While functioning formal institutions are a crucial transition driver, their form and quality are often poorly assessed. Notably, significant changes are imperative in informal institutions, particularly a shift in consumer attitudes. Moreover, the results indicate that being motivated by regulations influences the company's perception of other CE drivers and barriers. Particularly interesting are the more favourable attitudes of enterprises towards transition. Similarly, companies strongly motivated by concern for the environment tend to perceive some drivers more positively, while barriers become less severe.