Impact of innovation on the implementation of circular economy practices: evidence from firms in the Western Balkans

The circular economy (CE) is becoming increasingly important to scholars and practitioners. To implement circular economy practices, businesses are using other strategies to nudge adoption of the CE model. Investing in innovation is one of them. Innovation is considered a driving force for implementing circular economy practices in business operations. This article aims to empirically investigate the impact of innovation on the implementation of circular economy practices in the Western Balkans. The results of the binary logistic regression show that innovation is a driving force of these circular economy practices, including using renewable energy, saving materials, minimizing waste, supply of greener materials, recycling by using materials or waste within the company, and designing products that are easier to maintain, use, or repair. However, innovation does not emerge as a significant predictor of selling residues and waste to another company.