Advantages, Disadvantages, and Policy Needs in the Circular Economy Transition: Evidence From Turkish Manufacturing Firms

Abstract

The circular economy (CE) has gained increasing prominence as a sustainability-oriented strategy aimed at decoupling economic growth from resource depletion, waste generation, and environmental degradation. As a systemic and long-term socio-technical transformation, the CE transition requires fundamental changes in production systems, business models, institutional frameworks, and stakeholder interactions. These dynamics are particularly relevant for Turkiye, a major manufacturing and exporting economy closely integrated into European Union (EU) markets and increasingly exposed to evolving regulatory and market pressures related to circularity. This study aims to explore how large-scale Turkish manufacturing firms perceive as advantages and disadvantages of CE adoption and the policy measures considered necessary to support the CE transition. The study addresses three research questions: (i) what advantages firms associate with the CE transition, (ii) what disadvantages they encounter, and (iii) what policy needs they consider as critical for enabling effective CE implementation. An exploratory and descriptive qualitative research design was employed, based on semi-structured, in-depth interviews with sustainability managers and experts from 11 large-scale manufacturing exporters operating across 9 industrial sectors in Turkiye. The data was analyzed using qualitative content analysis to identify key themes and categories. The findings indicate that regulatory compliance, corporate reputation, investor interest, competitive advantage, and access to finance are perceived as the main advantages of the CE transition. In contrast, firms highlight the lack of a clear and strong regulatory framework, high implementation costs, limited access to affordable financial instruments, weak supply-chain coordination, insufficient consumer demand, and information gaps as major disadvantages. Environmental and social benefits are perceived as secondary, suggesting that CE adoption is primarily driven by compliance and competitiveness considerations. The study underscores the importance of coherent and enforceable regulatory frameworks, tailored financial instruments, demand-side policies such as circular public procurement, increased societal awareness, and sector-specific transition plans. By providing firm-level insights from an emerging economy context, the study offers policy-relevant contributions to the design of effective circular economy governance frameworks.