Greening the Bottom Line: Public Funding for Circular Economy Initiatives and Financial Stability
研究葡萄牙2020计划下获得循环经济资助的私营企业财务表现，发现资助未带来短期盈利增长，但提升了财务稳定性、出口和创新策略，对中小企业尤其具有战略价值。
ABSTRACT Public funding for circular economy (CE) initiatives plays a crucial role in shaping corporate financial performance, yet its effects remain underexplored. Grounded in the resource‐based view (RBV) of the firm, this study investigates the financial impact of CE funding on private firms, using Portugal as a case study. It analyses the financial outcomes of companies receiving funding for circular practices under the Portugal 2020 program in contrast to those supported in other areas, providing empirical insights into the viability of sustainability‐driven investments. A quantitative assessment was conducted using financial indicators from secondary sources, namely the Iberian Balance Analysis System (SABI) and COMPETE 2020. Various analytical techniques, including descriptive, differential, and cluster analyses, were applied to evaluate financial performance over time, focusing on profitability, stability, and investment behavior. Findings reveal no strong linear relationship between CE funding and immediate financial gains. However, CE‐funded firms demonstrated greater financial stability, stronger export and innovation strategies, and a tendency to be more mature businesses. These results suggest that circular practices support long‐term resilience rather than short‐term financial growth. By providing quantitative evidence on how CE funding shapes financial outcomes, this study contributes to the limited empirical research in this area, addressing a critical gap beyond policy and sustainability impact. Findings also highlight the need for policies that enhance financial incentives for sustainability adoption, especially for small and medium enterprises (SMEs). For SMEs, CE integration offers strategic opportunities beyond compliance, fostering innovation, diversification, and market competitiveness. Policymakers should strengthen incentives and awareness programs to accelerate sustainable business transitions.