Business Models for Circular Economy and Sustainable Development: the Case of Lease Transactions

Ion Ionascu and Mihaela Iona?cu
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Ion Ionascu: Bucharest University of Economic Studies, Romania
Mihaela Iona?cu: Bucharest University of Economic Studies, Romania

The AMFITEATRU ECONOMIC journal, 2018, vol. 20, issue 48, 356

Abstract: The purpose of this paper is to discuss the features of leasing as a business model in the circular economy, which is presumed to support sustainable development by product recirculation and driving economic performance. In particular, this study highlights microeconomic benefits for listed Romanian companies, showing that adopting a greener business model, as in the case of leasing, does not penalize firms economically but it is a catalyst for increasing their performance, both in terms of accountancy-based measures (return on assets and return on sales), but also in terms of the subjective perceptions of investors and financial analysts operating on the capital market (proxied by Tobin’s Q and market to book value of equity). Based on 266 observations from companies listed on the Bucharest Stock Exchange (BSE) during 2013-2016, the study uses regression analysis to show that financial performance is higher for quoted Romanian companies that use leasing and renting and that performance is also directly associated with leasing intensity, i.e. the share of the value of the rights to use leased goods in the total value of property, plant and equipment.

Keywords: circular economy; product-service systems (PSS); leasing and renting; sustainable development in Romania. (search for similar items in EconPapers)
JEL-codes: D29 L25 M19 M41 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:aes:amfeco:v:20:y:2018:i:48:p:356

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