A Definition and Theoretical Review of the Circular Economy, Value Creation, and Sustainable Business Models: Where Are We Now and Where Should Research Move in the Future?

Tom Lahti, Joakim Wincent, Vinit Parida

Research output: Contribution to journalReview ArticleScientificpeer-review

34 Citations (Scopus)

Abstract

This paper contains a theory review of value creation and the implementation of next-generation sustainable business models to profit in the circular economy. While previous research has pointed to the influence of society and regulatory policy on companies’ ability to address larger sustainability concerns and to change their ways of working, the field suffers from little theoretical guidance outlining how undertake circular business mode transformation in practice. By reviewing the field’s main theories, we illustrate significant implications for how future research can study profitability and competitiveness in the circular economy. This paper introduces the central components of circular business models and discusses links to contingency theory, transaction cost theory, resource-based theory, theory on networks and industrial economics, and agency theory. Understanding the circular economy and the ways companies can compete in the circular economy based on these theories is important for establishing important new research directions for scholars of sustainable business and circular business models.
Original languageEnglish
Peer-reviewed scientific journalSustainability
Volume10
Issue number8
Pages (from-to)1-19
Number of pages19
ISSN2071-1050
DOIs
Publication statusPublished - 07.08.2018
MoE publication typeA2 Review article in a scientific journal

Keywords

  • 512 Business and Management
  • circular economy
  • review
  • definition
  • sustainability
  • business models
  • value creation
  • future research

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