Do circular economy and green investments create value at the regional level? Evidence from Russian regions

Green investments and principles of circular development have become one of the prominent dimensions of regional development policies. The purpose of this article is to study the impact of green investments on circular economy indicators and contribution of these indicators to economic growth at the regional level. The study examines two key indicators of the circular economy: the share of captured and neutralized emissions into the atmosphere and the share of recycled water in the regional manufacturing systems. To test the proposed hypotheses, methods of regression analysis are used. Gross regional product is used as a predictor of value creation. The empirical base is Rosstat data for the period from 2015 to 2019. The results show that the circular economy indicators do not have a visible impact on economic growth at the regional level, but green investments increase the volume of resources used in circular manufacturing systems. It is probable that in Russian industrial economy, implementation of the circular economy principles is associated only with an increase in costs, which do not provide linear returns at the macroeconomic level.