Abstract
AbstractThe transition toward a circular economy (CE) implies the introduction of innovative practices at the firm level. Nevertheless, an important question is under discussion: What are the consequences of these practices on firm performance? Using a survey approach, this article analyzes the effect of CE practices related to product design on economic and environmental performance: life cycle assessment (LCA), product upgradability, and design for disassembly, reuse, and recycling in a sample of 300 firms. Our findings show that, although most of the companies are carrying out some eco‐innovation (innovations aimed to reduce the environmental damage of their activity), only process eco‐innovations new to the market improve economic performance but not environmental performance. However, LCA is a tool for implementing CE principles, helping to improve both. Eco‐design is positively associated with economic performance. The results provide managers and policy makers new insights on the long road to achieving this transition.
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