Private Firm Support for Circular Economy Regulation in the EU Policy Context

Abstract

As an empirical investigation of firm support for circular economy regulation in the European Union (EU) context, this paper is the first to connect the research field on corporate political activity with the growing research field on the circular economy. The paper presents these two research streams, draws on theories such as the resource-based view, and employs a hierarchical regression framework to formulate and test six hypotheses on what drives firms to support circular economy regulation. We find that smaller firms show more support for circular economy regulation than larger firms do and identify two moderating effects: the stock listing seems to moderate the relationship between firm size and a firm’s support for circular economy regulation; and a firm’s supply chain position has a counterintuitive negative moderating effect on the relationship between slack resources and a firm’s support for circular economy regulation. We discuss null findings and suggest avenues for future research at this under-researched intersection of policies and firms in the circular economy context.