Work

Central European sustainable economy: The role of green finance, technological innovation, and circular economy

Year: 2025

Type: article

Abstract: The European Green Deal has clarified the need to evaluate the factors affecting the ecological footprint and find strategies to reduce their impact. The study evaluates the correlation between green finance, technological innovation, circular economy, urbanization, energy consumption, economic progress, and ecological footprint. It analyzes data from Central European communities from 1990 to 2022, using robust econometric evaluations, including common correlated effect mean group (CCEMG) and augmented mean group (AMG) models, along with an initial examination of cross-sectional dependence, unit roots, cointegration, and slope heterogeneity. The findings highlight that a reduction in ecological footprints can be achieved through technological innovation, green finance, and a circular economy. In contrast, energy consumption, urbanization, and economic development tend to increase the ecological footprint. Advanced models such as fully modified ordinary least square (FMOLS) and Driscoll and Kraay (DSK) support these findings. The causality analysis revealed the unidirectional and bidirectional relationship between variables. Based on these outcomes, the study recommends that Central European countries implement suitable policies to push the transition toward a sustainable economy.

Source: E+M Ekonomie a Management

DOI: 10.15240/tul/001/2025-3-003

Authors: Takyi Kwabena Nsiah, Alina Cristina Nuta, Beata Gavurova, Charles Ofori, Felix Puime-Guillen

Institutions: Danubius International University, Tomas Bata University in Zlín, University of Hull, Universidade da Coruña, University of Bucharest

Language: English

Topic: Energy, Environment, Economic Growth

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Climate action, Responsible consumption and production, Decent work and economic growth

Open Access status: diamond

Funder: Tomas Bata University in Zlin