The Importance of the Eco‐Innovation, Knowledge Network and the Geographical Dimension in the Adoption of Circular Economy Business Models

Ángela Triguero, Lourdes Moreno‐Mondéjar and David Córcoles

Business Strategy and the Environment, 2025, vol. 34, issue 8, 10903-10924

Abstract: Adopting circular economy (CE) business models is strategically complex due to the diversity and complementarity of CE practices across the value chain. This study examines how eco‐innovation, open innovation and geographical proximity condition the adoption of four CE practices—eco‐design, circular inputs, life cycle assessment (LCA) and end‐of‐life strategies—using survey data from 300 Spanish firms and a multivariate probit model. Our findings reveal that CE practices are interdependent, making it essential to identify which combinations are most effective under specific strategic conditions. Upstream practices such as eco‐design, circular inputs and LCA require strong eco‐innovation capabilities, while downstream practices benefit from broad external collaboration networks, highlighting the role of open innovation. Additionally, local geographical orientation is crucial for eco‐design and LCA, suggesting that proximity facilitates implementation. In contrast, international entrepreneurial orientation supports most CE practices except eco‐design. These insights guide firms in tailoring CE strategies and inform targeted policy interventions.

Date: 2025
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