A Systems Perspective on Circular Economy Transitions: Integrating Bibliometric Networks with Econometric Evidence of Investment Drivers

The transition to a circular economy (CE) represents a complex socio-technical evolution, requiring synchronized policy frameworks and strategic capital reallocation. Adopting a systems-thinking lens, this study combines bibliometric network mapping with exploratory econometric modelling, to examine the associations between five core policy instruments and tangible circular investments (INV_CE) across the EU-27. Bibliometric analysis identifies the “firm” and “supply chain” as central functional hubs within the CE knowledge system, acting as primary mediators for capital flows. Econometric results indicate that Tradable Permits (TPOs) and an integrated Policy Integration Index (PII), comprising subsidies and energy-based taxes, show the strongest statistical association with circular investment patterns (p ≤ 0.001). However, patterns of structural disparity emerge between OECD and non-OECD Member States (p = 0.014), where the latter often exhibit a more rigid, tax-centric approach. Spearman correlations point toward institutional maturity, specifically government effectiveness (rs = 0.48) and eco-innovation capacity, as a potential systemic gateway for investment absorption. Furthermore, a structural decoupling appears between voluntary approaches (VAs) and governance capacity in emerging systems, suggesting that such instruments may be less effective without “institutional readiness.” The findings suggest that circular transition is path-dependent and congruent with the co-evolution of policy and institutional regimes. To bridge the investment gap, the study highlights the need for systemic interventions that move beyond “one-size-fits-all” regulations toward targeted strategies that strengthen the institutional and data reporting infrastructures of circular systems.