Circular economy and eco-innovation practices: a sustainable development approach

The academic literature establishes that the integration and application of circular economic strategies encourage industrial enterprises to enhance their eco-innovation practices and sustainable performance, which helps drive the transition to a more sustainable economic system. However, the body of knowledge and evidence presented in the current academic literature on the effects of circular economic practices on eco-innovation and sustainable development presents fragmented and, in some cases, contradictory evidence and results. Therefore, this study seeks to fill this gap and contribute to addressing this deficiency by analyzing and discussing the effects of circular economic practices on eco-innovation and sustainable development practices of industrial enterprises. To this end, a paper survey was distributed to a sample of 410 industrial enterprises in Mexico, analyzing the data obtained through PLS-SEM. The findings derived suggest that circular economic practices have a notable beneficial influence on both eco-innovation practices and sustainable development activities, while eco-innovation practices do not exert a significant positive influence on sustainable development activities. In this context, the results led to the final inference that Mexican industrial enterprises are in an incipient stage of transition from a traditional linear model to a circular economic model, which is improving eco-innovation practices and sustainable development.