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

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.

Automated summary

This study investigates the impact of a business's capabilities on its level of circular patent activism. By analyzing a sample of 120,406 patents in 2216 Spanish companies, a model is designed to examine the cause-and-effect relationship between the circular patents held by firms and their capabilities. The study provides new insights into 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.