Circular Economy in Small and Medium-sized Enterprises in the European Union: Heterogeneity Between and Within Countries

Abstract

In this paper we analyzed the different behavior of small and medium-sized enterprises (SMEs) with reference to eight specific Circular Economy (CE) actions. Data come from a Flash Eurobarometer survey that investigates resource efficiency practices adoption. We estimated classification and regressions trees (CART, in order to identify homogeneous groups of European countries with regard to the adoption of CE practices by SMEs and multilevel regression models to measure differences among SMEs in adopting sustainability management, considering firms' characteristics. Results of the analyses revealed heterogeneity both between and within European countries. Five groups of countries are identified with SMEs having a similar attitude toward Circular Economy. Within each group of factor, however, specific firms' characteristics have a non-negligible effect on firms’ decision to adhere to sustainability. The paper applied original methods to analyze hierarchical data and contributes to the literature on resource efficiency practice in European SMEs suggesting appropriate incentive policies.