Circular economy and entrepreneurship in Europe: An analysis of the impact of cultural factors, regulatory framework and rate of entrepreneurship

The aim of this work is to delve into the phenomenon of the circular economy (CE) to enhance understanding of the contextual factors that foster its development. We study how countries' cultural values, regulatory frameworks and rates of entrepreneurship, affect the transition to more circular economies. The model proposed and tested through a binomial logistic regression analysis of a sample of European small and medium-sized enterprises (SMEs), shows that such firms are more likely to adopt CE actions when located in more entrepreneurial societies, with more individualistic and feminine values, and with less stringent environmental regulations. Additionally, the study evidences a scale effect, but not an experience effect, in the transition to CE. Several practical and political implications are outlined.