Innovation and Circular Economy: Impact on the Profitability of the Latin American Retail Sector (2018–2023)
DOI:
https://doi.org/10.18779/csye.v10i1.1113Keywords:
circular economy, financial sustainability, technological innovation, business profitabilityAbstract
The study was justified by the need to analyze how the circular economy contributes to financial sustainability in Latin American retail corporations, an environment characterized by intense competitive pressure, economic volatility, and increasing socio-environmental obligations. The objective was to evaluate the impact of circularity strategies on the gross profit margin of Nueva Wal Mart de México S. de R.L. de C.V. and Corporación Favorita C.A. during the 2018–2023 period, considering their role in resource optimization, technological innovation, and the reduction of operating costs. Methodologically, a quantitative approach was adopted through the application of ARDL and VECM econometric models to identify short- and long-term relationships between financial variables and circular practices. The sample consisted of official data extracted from the annual financial statements of both companies, complemented with environmental and operational efficiency indicators. Additionally, Granger causality tests and stability diagnostics were conducted to ensure statistical validity. The main findings indicate that the circular economy, together with the adoption of digital technologies, contributed to increasing gross profit margins, strengthening profitability, and reducing costs associated with waste and resource-intensive operations. Both companies demonstrated at least one year of financial sustainability within the analyzed period. It is concluded that the strategic integration of circular economy practices constitutes an effective mechanism for enhancing financial performance, strengthening corporate resilience, and ensuring competitiveness in the retail sector within dynamic and demanding environments.
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Copyright (c) 2026 Daniel Iván Alvarez Avilez, Alma Iliana García Cañedo, Carlos Gabriel Borbón Morales, Altayra Geraldine Ozuna Beltrán
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