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The Effect of Circular Economy on Financial KPIs : A study on Swedish SMEs within the manufacturing industry

Circular economy is a topic that has gained a lot of attention during the last decades. Even so, there is still a gap of research at the micro-level regarding how circular economy influences financial performance. This paper aims to investigate if circular economy has a positive impact on financial performance indicators. Furthermore, it explores whether the firm size has an impact on the level of circularity as well as if circularity has an impact on financial performance. Using a sample of Swedish companies, this paper applied the framework of 9Rs to enhance the knowledge of the level of circularity.A survey was sent to 239 SMEs within the manufacturing industry in Sweden to gather information about the expected relation between circular economy and the financial performance. Previous research points out that companies struggle to implement circularity since the systems are not yet developed. This paper cannot confirm the reasons behind the low number of companies with adopted circular processes, which could be investigated further by other researchers. However, it was found that most companies are still focusing on sustainability and only a few companies have implemented circularity in their business model. Furthermore, firm size does not have an impact on the level of circularity which could be due to either that the majority of participating companies is classified as small or that most companies are still linear. At last, the analysis results show that circular economy has a positive influence on the financial KPIs sales, return on assets and economic value added and that the higher level of circularity, the greater the impact.

Identiferoai:union.ndltd.org:UPSALLA1/oai:DiVA.org:umu-196886
Date January 2022
CreatorsSchaumberger, Stefan, Degerstedt, Gabrielle
PublisherUmeå universitet, Företagsekonomi
Source SetsDiVA Archive at Upsalla University
LanguageEnglish
Detected LanguageEnglish
TypeStudent thesis, info:eu-repo/semantics/bachelorThesis, text
Formatapplication/pdf
Rightsinfo:eu-repo/semantics/openAccess

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