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This chapter analyzes the efficiency levels of a circular economy (CE) with an emphasis on transaction costs. It examines the governance aspect of CE activities in comparison to the predominant linear value creation. Extant CE research in business studies tends to be descriptive and lacks a theoretical foundation, particularly in understanding CE management. Transaction cost theory explains efficiency in economic organizing, lending itself to the study of arrangements that maximize resource efficiency at continued economic virtue. The conceptualization proposes that CE transaction costs are greater than those within the linear economy (LE), primarily due to the uncertainties about reciprocal dependencies, looping material complexities, exchanging novel information, and increased contracting efforts. Geographically bounded and institutionally homogeneous CE initiatives may curb these rising costs. By bringing efficiency concerns into CE analysis, the chapter demonstrates the applicability of transaction cost theory and highlights CE relevance to international business by pointing out spatial choice implications.

Involving residents in planning for sustainable tourism can help gain their support. This chapter examines residents' support for tourism development in Al-Juhfa Village, Saudi Arabia. It identifies three ways to gain residents' support. The first is inclusion of residents' heritage and agricultural activities in tourism planning, the second is development of infrastructure and tourism facilities that benefit locals, and third the empowerment of destination residents. Inclusion of these in the masterplan will strengthen resident support for tourism development. Recommendations for policymakers and destination managers on developing local attractions and strategies for empowering resident are provided.