Technological trajectories in the circular economy: Evidence from patent networks and patent portfolios

• Key-route main path analysis reveals dominant CE innovation patterns and drivers • Firm’s technological capability accelerates entry into the CE innovation frontier • Moderate CE specialization enhances persistence, but over-specialization hinders it • Technological trajectories of the circular economy can inform sustainable policy design This paper investigates the dominant technological developments within the field of the Circular Economy (CE) and the potential drivers shaping these dynamics, which have received limited attention to date. To this end, we apply the main path analysis to a patent citation network to identify the key technological trajectories in CE. We then characterize these trajectories in terms of their technological, geographical, and business features, as well as the environmental policy frameworks potentially associated with them. Subsequently, through regression analysis, we examine the influence of two core attributes of the principal applicants’ patent portfolios: total patent stock—used as a proxy for technological capability—and the share of patents in specific CE subfields—used as a proxy for technological specialization. Our results indicate that a firm’s accumulated knowledge stock significantly enhances its ability to reach the CE technological frontier. Moreover, while specialization in a CE domain is positively associated with persistence at the frontier, excessive specialization appears to constrain adaptive capacity, thereby reversing this positive effect.