‘Circular patents’ and dynamic capabilities: new insights for patenting in a circular economy

ABSTRACT

This study investigates the intangible assets related to the circular economy, defined as ‘circular patents’, that are classified and measured to be bundled into the innovation capabilities of a firm. The impact of a business’s capabilities on its level of circular patent activism is empirically analysed in this study in a theoretical framework of dynamic capabilities. To this end, a model of the cause-and-effect relationship between the circular patents held by firms and their capabilities is designed using partial least squares structural equation modelling (PLS-SEM) and is tested using a sample of 120,406 patents in 2216 Spanish companies. In this analysis, patents that can foster the sharing economy and the circular economy in sensu latu are also considered circular patents, in addition to waste patents and other green patents, offering an enhanced measurement of the intangible assets related to the circular economy. Based on these results, this study provides new insight of how accounting can enable or constrain the transition to a circular economy business model through the measurement and valuation of related intangible assets and the specific business’ capabilities in an environmental management framework.

KEYWORDS:

• Circular economy
• patents
• dynamic capabilities
• corporate finance

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Balance Sheet Analysis System (SABI) [online database]. 2014. Madrid.

2 See https://eippcb.jrc.ec.europa.eu/reference/ (accessed June 2022).

Additional information

Funding

This work was supported by Regional Government of Aragon [grant numbers S33_20R, LMP159_21]; and the University of Zaragoza [grant number UZ2021-SOC-02].

Notes on contributors

Pilar Portillo-Tarragona

Pilar Portillo-Tarragona is Senior Lecturer in finance at the Faculty of Economics and Business, University of Zaragoza (Spain). She holds a Degree in Economics and Business Studies and a PhD degree in Financial Economics [with Extraordinary Award in the Macro-area of Social Science], both obtained at University of Zaragoza. Her research interests mainly include Business Administration, Financial Economics, Financial Risk Management, Fixed Income Portfolio Management, E-Government and finance issues related to Eco-Innovation. Her work has been published in National and International Journals of Finance and Accounting, Environment and Planning and other journals.

Sabina Scarpellini

Sabina Scarpellini is associate professor at the Department of Accounting and Finance of the University of Zaragoza (Spain). She is PhD in Accounting and Finance (University of Zaragoza). She holds an MSc degree in Management of Organizations and a second PhD degree in renewable energy and energy efficiency, both obtained at the University of Zaragoza. With a wide previous professional experience in resources management in private R&D Institutes, she has participated and led many R&D projects on the field of circular economy, eco-innovation in business, resources management, energy poverty and business ethics and other energy related issues. She is author of a large number of international scientific papers and books, and is member of different national and international technology platforms and committees.

Luz María Marín-Vinuesa

Luz María Marín-Vinuesa is an Associate Professor of the Accounting andFinance area at the Department of Economics and Business of La RiojaUniversity (Spain). She holds a PhD degree in Economics and Business[with Extraordinary Award in PhD] obtained at La Rioja University. Herresearch interests focus on management control systems, and specially onthe non-financial performance measures to managing business, the qualitymanagement, and eco-innovation in business, between other issues. Herwork has been exposed in recognised conferences and published inNational and International peer-reviewed journals.