Business Models for Circular Economy and Sustainable Development: the Case of Lease Transactions

The purpose of this paper is to discuss the features of leasing as a business model in the circular economy, which is presumed to support sustainable development by product recirculation and driving economic performance. In particular, this study highlights microeconomic benefits for listed Roman...

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Main Authors: Ion Ionașcu, Mihaela Ionașcu
Format: Article
Language:English
Published: Academy of Economic Studies of Bucharest 2018-05-01
Series:Amfiteatru Economic
Subjects:
Online Access:http://www.amfiteatrueconomic.ro/temp/Article_2724.pdf
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author Ion Ionașcu
Mihaela Ionașcu
author_facet Ion Ionașcu
Mihaela Ionașcu
author_sort Ion Ionașcu
collection DOAJ
description The purpose of this paper is to discuss the features of leasing as a business model in the circular economy, which is presumed to support sustainable development by product recirculation and driving economic performance. In particular, this study highlights microeconomic benefits for listed Romanian companies, showing that adopting a "greener" business model, as in the case of leasing, does not penalize firms economically but it is a catalyst for increasing their performance, both in terms of accountancy-based measures (return on assets and return on sales), but also in terms of the subjective perceptions of investors and financial analysts operating on the capital market (proxied by Tobin’s Q and market to book value of equity). Based on 266 observations from companies listed on the Bucharest Stock Exchange (BSE) during 2013-2016, the study uses regression analysis to show that financial performance is higher for quoted Romanian companies that use leasing and renting and that performance is also directly associated with leasing intensity, i.e. the share of the value of the rights to use leased goods in the total value of property, plant and equipment.
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spelling doaj.art-c3679c4773ce4057aed694b943cbf5e02022-12-22T04:34:21ZengAcademy of Economic Studies of BucharestAmfiteatru Economic1582-91462247-91042018-05-01204835637210.24818/EA/2018/48/356Business Models for Circular Economy and Sustainable Development: the Case of Lease TransactionsIon Ionașcu 0Mihaela Ionașcu1Bucharest University of Economic Studies, RomaniaBucharest University of Economic Studies, RomaniaThe purpose of this paper is to discuss the features of leasing as a business model in the circular economy, which is presumed to support sustainable development by product recirculation and driving economic performance. In particular, this study highlights microeconomic benefits for listed Romanian companies, showing that adopting a "greener" business model, as in the case of leasing, does not penalize firms economically but it is a catalyst for increasing their performance, both in terms of accountancy-based measures (return on assets and return on sales), but also in terms of the subjective perceptions of investors and financial analysts operating on the capital market (proxied by Tobin’s Q and market to book value of equity). Based on 266 observations from companies listed on the Bucharest Stock Exchange (BSE) during 2013-2016, the study uses regression analysis to show that financial performance is higher for quoted Romanian companies that use leasing and renting and that performance is also directly associated with leasing intensity, i.e. the share of the value of the rights to use leased goods in the total value of property, plant and equipment.http://www.amfiteatrueconomic.ro/temp/Article_2724.pdfcircular economyproduct-service systems (PSS)leasing and rentingsustainable development in Romania
spellingShingle Ion Ionașcu
Mihaela Ionașcu
Business Models for Circular Economy and Sustainable Development: the Case of Lease Transactions
Amfiteatru Economic
circular economy
product-service systems (PSS)
leasing and renting
sustainable development in Romania
title Business Models for Circular Economy and Sustainable Development: the Case of Lease Transactions
title_full Business Models for Circular Economy and Sustainable Development: the Case of Lease Transactions
title_fullStr Business Models for Circular Economy and Sustainable Development: the Case of Lease Transactions
title_full_unstemmed Business Models for Circular Economy and Sustainable Development: the Case of Lease Transactions
title_short Business Models for Circular Economy and Sustainable Development: the Case of Lease Transactions
title_sort business models for circular economy and sustainable development the case of lease transactions
topic circular economy
product-service systems (PSS)
leasing and renting
sustainable development in Romania
url http://www.amfiteatrueconomic.ro/temp/Article_2724.pdf
work_keys_str_mv AT ionionascu businessmodelsforcirculareconomyandsustainabledevelopmentthecaseofleasetransactions
AT mihaelaionascu businessmodelsforcirculareconomyandsustainabledevelopmentthecaseofleasetransactions