The interplay between circular economy and productivity : multiple case studies in remanufacturing companies

Abstract

The circular economy (CE) refers to a cluster of strategies which are necessary to create more sustainable production-consumption systems. Although remanufacturing is a key principle of CE, there is limited empirical research investigating its relationships with the productivity of firms, supply chains, or nations. This study therefore aimed to investigate the interplay between CE (with a focus on remanufacturing) and productivity. Underpinned by a critical realist philosophy, eight qualitative case studies were conducted in remanufacturing firms in the UK. Data was collected through semi-structured interviews and triangulated with financial statements and publicly available information. As a key result, this research demonstrated that the relationship between remanufacturing and firm productivity is moderated by the firm’s chosen value proposition. Specifically, it found that remanufacturers offering specialised and quick solutions can be productive, whilst competing through price might reduce the productivity of remanufacturers over time. Supply chains can benefit from speedy remanufacturing which prevents disruption in their operations. The productivity of the studied remanufacturing firms was found to be somewhat in between the productivity of the services and the manufacturing sectors. This study contributes to develop the literature in CE and management through the development of eight propositions to guide future research, and highlights implications for managers and policymakers.