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<p>The purpose of this study is to assess whether circular economy (CE) impacts the valuation of automobile firms. Since the world is paying more attention to sustainability, knowing whether recycling raise the profit levels of automotive companies in developing countries. This research relies on data from 31 automobile companies over the years 2012–2023, employing Quantile Panel Data Regression. The test outcomes show that firms with higher CE practices have better valuations at lower and moderate levels. In addition, a U-shaped relationship was found, implies that increase in CE initially decline valuation but after certain reaching threshold level increase in CE leads to increase valuation of firms. This research shows that investing in CE makes a difference for the automotive industry in India. It provides valuable and detailed advice to policymakers, investors and those in industry leadership. This study encourages the use of policy incentives and firm investments in sustainability to improve company competitiveness, maintain loyalty from investors and create lasting benefits. This research is the first to the best of my knowledge, and the use of quantile regression to show how CE activities can affect firm valuation in an emerging country.</p>

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Does Circular Economy Effect the Valuation of the Indian Automobile Firms?

  • 期刊论文

  • 发表日期：

    2026年3月2日

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  • Pracheta Tejasmayee,
  • Bhakti Agarwal,
  • Shailesh Rastogi,
  • Rohini Rokde

摘要

The purpose of this study is to assess whether circular economy (CE) impacts the valuation of automobile firms. Since the world is paying more attention to sustainability, knowing whether recycling raise the profit levels of automotive companies in developing countries. This research relies on data from 31 automobile companies over the years 2012–2023, employing Quantile Panel Data Regression. The test outcomes show that firms with higher CE practices have better valuations at lower and moderate levels. In addition, a U-shaped relationship was found, implies that increase in CE initially decline valuation but after certain reaching threshold level increase in CE leads to increase valuation of firms. This research shows that investing in CE makes a difference for the automotive industry in India. It provides valuable and detailed advice to policymakers, investors and those in industry leadership. This study encourages the use of policy incentives and firm investments in sustainability to improve company competitiveness, maintain loyalty from investors and create lasting benefits. This research is the first to the best of my knowledge, and the use of quantile regression to show how CE activities can affect firm valuation in an emerging country.