Investigating the Impact of Circular Economy on Stock Market Performance: European Union Countries

Abstract

Nowadays, Circular economy (CE) has a huge impact on stock market performance especially in EU countries that promote sustainable practices and encourage large companies to implement those practices in their business operations, this research investigates the impact of circular economy on stock market performance through the mediating effect of the sustainable development goals in the European Union countries by using the data of some selected EU countries over the period 2000-2021. Basically, the variables used to measure circular economy are, Annual freshwater withdrawal, Generation of municipal waste per capita, Resource productivity, Recycling rate, and Recovery rate of recycling, further the stock market performance is measured by stock indices, Additionally, the methodology used to test for the relationships between the variables are panel least square, Stata program. Findings revealed that the CE has a positive significance in the stock market performance. However, the SDGs have insignificant relationship on the stock market performance, lastly, and there is no relation between the CE and the SDGs in the EU countries. Accordingly, it’s highly recommended for other researchers to study the topic in context of Egypt, as in our research we focused on EU countries because the European Union considered highly innovative and applying those CE practices