Managing the circular economy: A case of the European union countries

Recycling is the foundation of the European Union's circular economy strategy. However, significant disparities persist among the EU member states. This study examines how economic, financial, and regulatory factors influence recycling performance across the European Union. Using the Method of Moments Quantile Regression (MMQR), the study evaluates the effects of circular innovation, private investment, environmental taxation, trade in recyclable materials, and financial institutional efficiency on recycling rates. The results reveal circular innovation to yield greater returns in advanced economies, whereas investment and financial development are more effective in smaller-capacity municipalities. Environmental taxation enhances recycling outcomes, while trade in recyclables mitigates short-term constraints but risks externalizing circular practices. The findings underscore the differentiated impacts of policy tools across contexts and provide empirical evidence to inform the design of adaptive, integrated policy frameworks that strengthen recycling performance and support the European Union's circular economy objectives.