Armenia Androniceanu

Department of Administration and Public Management, 

Bucharest University of Economic Studies, Romania;

Research Department, University of Social Sciences, Lodz, Poland 

armenia.androniceanu@man.ase.ro

ORCID 0000-0001-7307-5597

Circular economy as a strategic option to promote sustainable economic growth and effective human development

Jani Kinnunen

Department of Information Systems, 

Åbo Akademi University,

Finland

jani.kinnunen@abo.fi

ORCID 0000-0002-0154-6617

Irina Georgescu

Department of Economic Informatics and Cybernetics, 

Bucharest University of Economic Studies,

Romania

irina.georgescu@csie.ase.ro

ORCID 0000-0002-8536-5636 

Abstract. Promotion and implementation of sustainable production and consumption practices have become a priority to obtain social, economic, and environmental benefits. Circular economy is based on an integrative approach which requires the analysis of all the relevant factors that may determine changes in the classical linear model of economic growth. From this perspective, we should talk not only about some sector of activity as a net contributor to the circular economy but of several sectors. Our research aim was to identify and analyze the contributors to circular economy and its evolution within the EU member states from three broader perspectives: sustainable development, environment, and economic growth. Another objective was to reduce the data dimensionality by applying principal component analysis (PCA). Databases of the Eurostat and the World Bank were utilized to select 13 key indicators. The PCA research method was applied to 25 EU member states in the year 2018. Three factors were found to explain 70.06% of the total variation in data, the main components were identified, and a circular economy index was constructed for comparative purposes. The results suggest that circular economy is a strategic option exercisable to create competitive advantage and promote sustainable economic growth.

Received: May, 2020

1st Revision: December, 2020

Accepted: March, 2021

DOI: 10.14254/2071-8330.2021/14-1/4

JEL Classification: C38, F43, O15

Keywords: circular economy, economic growth, human development, principal component analysis