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

Kwabena Nsiah Takyi (), Alina Cristina Nuta, Beata Gavurova, Charles Ofori and Felix Puime-Guillen
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Kwabena Nsiah Takyi: Tomas Bata University in Zlín
Alina Cristina Nuta: Danubius International University
Beata Gavurova: Tomas Bata University in Zlín
Charles Ofori: University of Hull
Felix Puime-Guillen: University of A Coruna

E&M Economics and Management, 2025, vol. 28, issue 3, 32-49

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.

Keywords: Green finance; technological innovation; circular economy; urbanization; economic progress; Central Europe (search for similar items in EconPapers)
JEL-codes: Q01 Q30 Q40 Q55 (search for similar items in EconPapers)
Date: 2025
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https://doi.org/10.15240/tul/001/2025-3-003

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Persistent link: https://EconPapers.repec.org/RePEc:bbl:journl:v:28:y:2025:i:3:p:32-49

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

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