Selling the circularity: Investigating the impact of circularity promotion on the performance of Italian manufacturing companies

Promoting the circularity of business practices and of product offerings represents a pivotal process in increasing the value of circular products and encouraging the market to recognize such a value. This study investigates the communication abilities of companies manifesting an interest in adopting circular economy practices, with the aim to assess the extent to which promoting circularity increases economic performance. Employing a unique web-scraped dataset of Italian circular companies’ websites, we captured and analyzed the online promotional efforts of a unique sample of manufacturing companies. Underpinned by the signaling theory, our estimation results illustrate that the ability of small and medium-sized enterprises (SMEs) to signal the circularity of their business practices on the website generally increases performance and such impact is larger among low performing companies. Our study advances knowledge on: 1) the impact of promoting circularity on economic performance, 2) the efficacy of signaling in the context of circular practices’ adoption.