Cristian Bușu, Mihail Bușu, Stelian Grasu, Sadok Ben Yahia
The rapid growth of Waste Electrical and Electronic Equipment (WEEE) in the European Union highlights the need for a rigorous understanding of its long-term dynamics and the role of innovation in shaping its trajectory. This study investigates how innovation influences the dynamics of WEEE generation in the European Union. We develop an innovation-adjusted mathematical model of e-waste as a stock flow system and prove the existence and global stability of a unique positive equilibrium. The model analytically generates an environmental Kuznets-type turning point and shows that innovation reduces waste accumulation by accelerating effective depreciation. To link the theoretical results with empirical patterns, we embed the model in a STIRPAT panel specification using annual data for 27 EU member states from 2013 to 2023, where EU Eco-innovation Index (EEI) serves as a composite index which directly captures policy-driven green technology and circular economy activities, aligning precisely with our theoretical framework. We also extend the quasi-demeaning transformation to panels with correlated shocks and establish its consistency under a factor structured error process. The empirical estimates confirm a positive effect of income on WEEE at lower development levels and a negative coefficient on its squared term, consistent with an inverted U pattern, while innovation is associated with lower waste intensity. These findings demonstrate how mathematical modeling can strengthen the interpretation of macro panel evidence on circularity and provide a basis for future optimization of innovation driven sustainability transitions.