ANALYTICAL STUDY OF CIRCULAR ECONOMY PRACTICES AND FINANCIAL PERFORMANCE IN MANUFACTURING FIRMS

Abstract

The concept of a circular economy has taken the format of a strategic concern with the manufacturing firms shifting their focus to the linear model of take-make-Dispose to the socalled circular model to realize sustainable growth and efficiency with respect to resource. The conceptual review of this paper examines the way that strategies in circular economy (resource recovery, recycling, remanufacturing, eco-design and waste reduction) has implemented and identified the financial performance of manufacturing firms. The theoretical empirical approach used in the study is where primary data is retrieved through manufacturing facilities and secondary financial information to identify the relationships between circular programs and the key performance ratios like profitability and cost efficiency, turnover on investments and revenue increment. Statistical tests such as correlation and regression are also used to test the relationships to determine its strength and significance. According to the results, the companies which were the most devised were circular economy which are more prone to have better efficiency of operations and financial sustainability in the long-term, although more costs may be experienced on the operation during the transition period. The research article would contribute to the body of literature since it proposes evidence regarding the manufacturing sector, as well as managerial suggestions on the incorporation of sustainability and financial strategy. The policymakers and industry leaders can utilize the insights to come up with enabling models that encourage the change of the manufacturing ecosystem to be circular.