The Impact of Quality of Governance, Renewable Energy and Foreign Direct Investment on Sustainable Development in Cee Countries

Abstract

Recent debates on the Environmental Kuznets Curve (EKC) in the context of the European Green Deal highlights that pollution could be controlled using channels other than economic development. The role of renewable energy consumption in reducing pollution should be correlated with quality of governance, which could support initiatives for a cleaner environment. This study considers the renewable Kuznets curve for 10 Central and Eastern European countries in the period 2006–2019, using economic indicators (index of economic freedom, foreign direct investment, domestic credit to private sector and labour productivity) as control variables and indicators reflecting the quality of governance (Worldwide Governance Indicators and Google Trend indexes associated to key-word corruption in each language). The research is based on two types of panel data models: panel dynamic OLS model (PDOLS) and panel autoregressive distributed lag models based on pooled mean group (PMG) estimator. The results indicate that government effectiveness reduces pollution in both the short-run and long-run, while control of corruption and rule of law supports environmental protection in the long-run. Google searches for corruption as a proxy for quality of governance indicate that tGHG emissions have immediate and practical implications in nowcasting pollution.

The Impact of Energy Innovations and Environmental Performance on the Sustainable Development of the EU Countries in a Globalized Digital Economy

“…Following the research hypotheses drawn, we brought robust empirical evidence to attest that energy innovations, environmental As regards the differences among the EU countries in terms of sustainable development, financial and trade globalization, environmental performance, and the degree of integration of digital technologies, revealed by the cluster analysis (H 5 ), the following tailored policies and strategies could be considered by the EU MS to diminish the deterring factors of environmental and digitalization performance and enhance sustainable economic development: i) for the countries comprised in C1 (France, Belgium, Sweden, Finland, the Netherlands, Denmark, Germany, Austria, Ireland, and Luxembourg), with very good performance of financial globalization, environmental performance, digital integration of technologies on the background of high economic development, policies to enforce these dimensions are needed, within a comprehensive trade globalization process, as Álvarez-Herránz et al (2017a) and Shahbaz et al (2018) also stated for the developed countries of the OECD; ii) in the case of EU MS comprised in C2 (Italy, Malta, Spain, Cyprus, Slovenia), better integration of financial and trade globalization, involving state authorities in the process of reducing pollution to enhance environmental performance, as well as technological innovation may improve sustainable economic development, as Simionescu et al (2021) also mentioned; iii) as regards the countries included in C3 (Hungary, Lithuania, Bulgaria, Estonia, Greece, Poland, the Slovak Republic, Croatia, Portugal, Romania, Latvia, the Czech Republic), consistent policies are needed in order to improve the environment-energy-growth nexus with the economic globalization and technological innovation.…”

“…Technological innovation also generates a higher rate of acceptance and use of renewable energy, given the reluctance shown by certain stakeholders, such as local communities or citizens (Spandagos et al, 2022). Simionescu et al (2021) tested the renewable Kuznets curve for ten countries from Central and Eastern Europe (CEE) using the index of economic freedom, FDI, domestic credit to the private sector and labour productivity, as control variables, and indicators reflecting the quality of governance, for the period 2006-2019. The study demonstrated the importance of involving state authorities in the process of reducing pollution, which through various tools can shape both the behavior of local companies and consumers and foreign capital businesses.…”

“…Cluster analysis results (Ward method). and digital transformations have directly and globally shaped the sustainable development of the EU countries within the economic globalization framework (H 1 -H 4 ), with focus on awareness for the following directions: higher and better allocation of national expenditure on environmental protection, reconsideration of energy efficiency by better involving the state authorities in the process of pollution reduction, which through various tools can shape both the behavior of local companies and consumers and foreign capital businesses, asSimionescu et al (2021) also mentioned; energy innovations deployed by using the renewable energy, including advanced technologies and ICT, since economic growth may induce the rise of ecological footprint, asRamzan et al (2022) also stated.…”

Does Public Health Influence Economic Performance? Investigating the Role of Governance and Greener Energies for the Case of China

“…Environmental governance has become important in achieving the green deal goals for sustainability. Simionescu et al ( 26 ), in their research of European countries from the year 2006 to 2019, depict that corruption control, a proxy of governance effectiveness, in the long run, plays a vital role in enhancing environmental sustainability. Shahzad et al ( 27 ) suggested that the role of government and institutional quality helps in achieving environmental and developmental sustainability.…”

“…According to researchers, the negative association occurs usually in those countries where there is no role of institutions. Third, the effective form of government and political stability impact the quality and improvement in a sustainable form of government ( 26 ).…”