The development of CE business models in firms: The role of circular economy capabilities

This paper investigates how the capabilities that are related to the circular economy (CE) affect the development of products and processes that are compatible with CE business models. From the dynamic capabilities perspective, we assume that the development of CE in the firm implies the use of firm capabilities and the alignment of these in the development of a dynamic process of innovation towards the development of CE in firms. The analysis is based on a cross-sectional database from the EU survey on the Circular Economy in the year 2015, including 870 respondents. Our study extends the current literature on the factors that affect the development of CE business models in organisations. Our results suggest that CE-related capabilities have a positive effect in the implementation of CE business models in the organisation. In particular, we find that competences, standards and information are important in the context of the CE, playing a key role in the developing CE product and process.