Circular economy as a driver of sustainable growth: quantitative analysis of the role of recycling and secondary raw materials in the EU

The aim of this research is to determine the significance of the impact of selected environmental protection indicators, with a focus on waste management, on the sustainability of economic growth in EU countries (21 member states) over the period 2013–2022. To conduct this analysis, four independent variables were selected, belonging to the domains of waste management the (recycling rate of municipal waste and recycling rate of packaging waste by type of packaging) and secondary raw material management (the circular material use rate and trade in recyclable raw materials, imports from outside the EU27). Sustainable economic growth was measured by gross domestic product per capita (GDP per capita), which serves as the dependent variable in this study. The aforementioned independent variables can also be categorized as circular economy (CE) indicators, which have been gaining increasing relevance in the EU context. Using a panel regression analysis, the potential influence of CE indicators on sustainable economic growth was examined both over time and across entities, through the lens of waste management. The statistical analysis was conducted by applying four econometric models: pooled OLS (POLS), fixed effects (FEs), random effects (REs), and mixed effects (MEs). The results of the analysis confirmed several specific hypotheses (depending on the model used), which posit a statistically significant positive impact of CE variables on GDP per capita.