Search Results (94)

This study aims to empirically investigate the contemporaneous, bidirectional causal relationship between innovation and entrepreneurial activities in China by constructing a dynamic simultaneous equation system. Using panel data from 31 provincial administrative regions from 2000 to 2022, our empirical results demonstrate a robust two-way causal relationship: vigorous innovation activities significantly stimulate the emergence and subsequent growth of entrepreneurial ventures, while entrepreneurial dynamism similarly promotes regional innovation. These findings remain stable and consistent after rigorous robustness checks. Further, employing a Panel Vector Autoregression (PVAR) approach in extended analyses, we find clear evidence of a stable positive feedback loop between innovation and entrepreneurship, characterized by progressive and cumulative effects. Additionally, regional heterogeneity analysis indicates that macroeconomic disparities significantly influence the bidirectional relationship between innovation and entrepreneurship. Specifically, differences in regional resource endowments and economic conditions largely account for variations in innovation–entrepreneurship dynamics across regions. Consequently, local governments should tailor innovation and entrepreneurship policies to regional contexts to maximize economic outcomes effectively under China’s current development paradigm. Full article

The study investigates the contribution of technology (TECH), quantified by Internet penetration, in influencing tourism performance (TP) among the top ten touristic nations in Europe: France, Spain, Italy, Turkey, the United Kingdom, Germany, Greece, Austria, Portugal, and the Netherlands. Using panel data from 2000–2022, the study includes additional structural controls like environment quality, gross domestic production (GDP) per capita, exchange rate (ER), and safety index (SI). The Method of Moments Quantile Regression (MMQR) is employed to capture heterogeneous effects at different levels of TP, and Driscoll–Kraay standard error (DKSE) correction is employed to make the analysis robust against autocorrelation as well as cross-sectional dependence. Spectral–Granger causality tests are also conducted to check short- and long-run dynamics in the relationships. Empirical results are that TECH and SI are important in TP at all quantiles, but with stronger effects for lower-performing countries. Environmental quality (EQ) and GDP per capita (GDPPC) exert increasing impacts at upper quantiles, suggesting their importance in sustaining high-level tourism economies. ER effects are limited and primarily short-term. The findings highlight the need for integrated digital, environmental, and economic policies to achieve sustainable tourism development. The paper contributes to tourism research by providing a comprehensive, frequency-sensitive, and distributional analysis of macroeconomic determinants of tourism in highly developed European tourist destinations. Full article

Rapid urbanization and escalating disaster risks necessitate resilient urban governance systems. Smart city initiatives that leverage digital technologies—such as the internet of things (IoT), big data analytics, and artificial intelligence (AI)—demonstrate transformative potential in enhancing emergency management capabilities. However, empirical evidence regarding their causal impact and underlying mechanisms remains limited, particularly in developing economies. Drawing on panel data from 275 Chinese prefecture-level cities over the period 2006–2021 and using China’s smart city pilot policy as a quasi-natural experiment, this study applies a multi-period difference-in-differences (DID) approach to rigorously assess the effects of smart city construction on emergency management capabilities. Results reveal that smart city construction produced a statistically significant improvement in emergency management capabilities, which remained robust after conducting multiple sensitivity checks and controlling for potential confounding policies. The benefits exhibit notable heterogeneity: emergency management capability improvements are most pronounced in central China and in cities at the extremes of population size—megacities (>10 million residents) and small cities (<1 million residents)—while effects remain marginal in medium-sized and eastern cities. Crucially, mechanism analysis reveals that digital technology application fully mediates 86.7% of the total effect, whereas factor allocation efficiency exerts only a direct, non-mediating influence. These findings suggest that smart cities primarily enhance emergency management capabilities through digital enablers, with effectiveness contingent upon regional infrastructure development and urban scale. Policy priorities should therefore emphasize investments in digital infrastructure, interagency data integration, and targeted capacity-building strategies tailored to central and western regions as well as smaller cities. Full article

Amid mounting global climate change, resource scarcity, and environmental pressures, regional economies are accelerating their transition towards green and inclusive growth models. This research examines how China’s New Energy Demonstration City (NEDC) policy influences inclusive green growth (IGG), including its underlying mechanisms. Harnessing policy interventions as quasi-natural experiments, we use 2006–2022 panel datasets of 284 Chinese cities to develop a spatial difference-in-differences (SDID) model for causal inference. The findings are as follows: (1) The NEDC policy significantly enhances IGG in pilot cities while generating positive spatial spillover effects on neighboring cities, exhibiting an inverted U-shaped pattern; (2) The policy effects demonstrate pronounced regional heterogeneity, with the strongest impact observed in western China; (3) Mechanism analysis confirms that green technology innovation serves as a critical pathway through which the NEDC policy drives IGG. These findings provide robust empirical evidence for designing scalable policy promotion mechanisms and refining innovation-driven governance frameworks. Full article

Many environmental risks, such as global warming and depletion of natural resources, force governments to achieve economic growth and financial development without causing environmental degradation. The dependency of countries’ dependence on fossil fuels also causes energy supply security problems due to the associated risks at regional and global levels. These reasons lead countries to diversify and increase their renewable energy investments. In this context, this study focuses on the most attractive countries in terms of renewable energy investments and analyzes the relationships between renewable energy consumption (REC), carbon dioxide emissions (CO₂), economic growth (EGRO), financial development (FD), and energy dependence (EDP) using the panel regression method. This research uses data from 38 countries between 1991 and 2021 within the scope of the “Renewable Energy Attractiveness Index” (RECAI) created by Ernst & Young. As a result of the heterogeneity and cross-sectional dependency tests, the data were analyzed using the Westerlund cointegration test, the Augmented Mean Group (AMG) estimator, and the Emirmahmutoglu and Kose causality test. The findings from this study show that FD and EGRO have a positive and significant effect on REC, whereas they have a negative and significant relationship with CO₂ emissions. Findings from the causality test show that FD has an impact on both CO₂ and EGRO. In addition, within the scope of this study, a causality was determined between EDP and REC, and a mutual relationship between energy demand and CO₂ was revealed. In light of these findings, governments should increase their investments in renewable energy to ensure sustainable economic growth and energy supply security while minimizing environmental degradation. Full article

To achieve climate goals and promote clean energy, China has introduced preferential VAT policies to promote the development of renewable energy power generation industries, but their actual impact on corporate profitability remains underexplored. This study innovatively applies a DID approach, enhanced with PSM and dynamic modeling, to evaluate the causal effects of VAT incentives on firm ROE. Using panel data from 98 listed power generation companies between 2010 and 2024, this study distinguishes treatment effects across the wind, solar, and hydrogen sectors, revealing significant heterogeneity. Unlike prior studies, it further investigates time-lagged impacts and fiscal efficiency indicators to assess policy sustainability. Results show that VAT incentives significantly enhance ROE for wind and solar firms, while the hydrogen sector exhibits weaker responses. These findings not only confirm the effectiveness of targeted tax incentives but also offer new insights for refining fiscal policies to better support sector-specific transitions toward renewable energy. This study provides empirical evidence for the design of China’s fiscal energy policy to maximize the growth of the renewable energy sector. More broadly, this study provides lessons for global green transition policies, illustrating how well-designed fiscal incentives can support sustainable energy development worldwide. Full article

Amidst the dual challenges of escalating ecological environmental pressures and economic transformation globally, green innovation emerges as a pivotal pathway toward achieving high-quality sustainable development. To elucidate how digitalization and novel productive forces synergistically drive the green transition, the research utilizes panel data from 30 provincial-level administrative regions in China spanning 2009 to 2022, constructing a green innovation efficiency measurement frame-work grounded in the Super Slack-Based Measure (Super-SBM)model, alongside a novel productive forces evaluation system based on the triad of laborers, labor objects, and means of production. Employing spatial difference-in-differences and double machine learning methodologies within a quasi-natural experimental design, the research investigates the causal mechanisms through which digital empowerment and novel productive forces influence regional green innovation efficiency. The findings reveal that both digital empowerment and novel productive forces significantly enhance regional green innovation efficiency, exhibiting pronounced positive spatial spillover effects on neighboring regions. Heterogeneity analyses demonstrate that the promotive impacts are more pronounced in eastern provinces compared to central and western counterparts, in provinces participating in carbon trading relative to those that do not, and in innovation-driven provinces versus non-innovative ones. Mediation analysis indicates that digital empowerment operates by fostering the aggregation of innovative talent and elevating governmental ecological attentiveness, whereas new-type productivity exerts its influence primarily through intellectual property protection and the clustering of high-technology industries. The results offer empirical foundations for policymakers to devise coordinated regional green development strategies, refine digital transformation policies, and promote industrial structural optimization. Furthermore, this research provides valuable data-driven insights and theoretical guidance for local governments and enterprises in cultivating green innovation and new-type productivity. Full article

The rapid expansion of plastic waste trade has intensified environmental pressures, accelerating ecosystem degradation and climate change. We examine the long-term impacts of plastic waste imports and domestic waste production on ecological footprints and greenhouse gas emissions across 20 countries representing 70% of global plastic waste trade and 45% of world GDP. Under the Environmental Kuznets Curve (EKC) framework, we explore nonlinear interactions among economic growth, urbanization, and sustainability goals. Using a panel simultaneous equations approach, we apply Pedroni, Kao, and Westerlund cointegration tests and Fully Modified and Dynamic OLS estimators to address endogeneity and heterogeneity. Robustness checks include alternative environmental indicators and the Dumitrescu–Hurlin panel causality test. Results demonstrate a stable long-run equilibrium: plastic waste imports substantially increase ecological footprints and emissions, while progress on sustainable development goals mitigates some damage. The negative GDP squared coefficient supports the EKC hypothesis, indicating that environmental impacts rise initially with growth but decline once income exceeds a threshold. These findings highlight the need for stronger international regulations, enhanced waste management infrastructures, and circular economy strategies. Focused investment in sustainable technologies and global cooperation is essential to lower environmental costs of plastic waste trade. Full article

The main objective of this study is to examine the impact of the environmental, social and governance (ESG) pillars on financial performance. To do so, we constructed a sample of 126 non-financial companies in the MENAT region between 2017 and 2023. To estimate this relationship, we used the system GMM method, addressing endogeneity concerns like reverse causality, unobserved heterogeneity and dynamic panel bias. The empirical evidence confirms that environmental and social pillars positively and significantly contribute to financial performance, highlighting their strategic role in value creation. The governance pillar, however, does not appear to influence financial performance directly, suggesting that the governance processes within the region are not efficient enough to lead to substantial financial impacts. Of greater significance, though, are the positive and significant effects of interactions between audit quality and ESG, such that good audit practice can increase the effectiveness of ESG efforts in terms of affecting financial performance. The results may be useful for policy makers and company managers in the MENAT countries by increasing ESG performance. Full article

Purpose: The acquirer’s corporate environmental performance (CEP) in mergers and acquisitions has been a subject of debate, yielding mixed results. This paper uses the US firm-level data of 1437 M&A deals from 2002–2019 to examine the impact of overall CEP, resource use, emissions, and innovation on the acquirers’ post-merger market value. Design/methodology/approach: This study employs multi-level fixed effects panel regression using Ordinary Least Squares (OLS) and the instrumental variable (IV) 2SLS method to estimate the models and compare the results with those from robust estimation. Absorbing the multiple levels of fixed effects (i.e., firm, industry, and year) offers a novel and robust algorithm for efficiently accounting for unobserved heterogeneity. The results from IV (2SLS) are more convincing, as the method overcomes the problem of endogeneity due to reverse causality and sample selection bias. Findings: The authors find that CEP has a significant impact on market value, particularly in the long term. While both resource use and emissions performance have positive effects, emissions performance has a stronger impact, presumably because external stakeholders and market participants are more concerned about emissions reduction. The performance of environmental innovation is relatively weak compared to other pillars. Descriptive analysis shows low average scores in environmental innovation compared to the resource use and emissions performance of the acquirers. However, large deals yield significant returns from investing in environmental innovation in both the short and long term compared to small deals. Practical implications: This paper offers several practical implications. First, environmental performance can help improve the acquirer’s long-term market value. Second, managers can focus on the strategic side of environmental performance, based on its pillars, and benchmark their relative position against peers. Third, environmental innovation can be considered a new potential, as the market as a whole in this area is still lagging. Given the growing pressure to improve environmental technology and innovation, prospective acquirers should confidently prioritise actions on green revenue, product innovation, and capital expenditure now rather than ticking these boxes later. Originality value: The key contribution is offering valuable insights into the impact of acquirers’ environmental performance on long-term value creation in mergers and acquisitions (M&A). These results fill the gap in the literature focusing mainly on the effect of environmental pillar and sub-pillar scores on acquirer’s firm value. The authors claim that analysing sub-pillar-level granularity is crucial for accurately measuring the effects on firm-level performance. Full article

The investment–saving relationship has been the subject of much debate. On the one hand, there is the conventional mainstream neoclassical school of thought that advocates for the idea that saving determines investment. On the other hand, heterodox economists (mainly in the post-Keynesian/structuralist tradition) posit an inverse relationship between these variables. This article empirically investigates the direction of causality in order to contribute to the existing literature on the topic. To this end, two Granger panel tests are applied to a dataset of 106 countries over the period from 1980 to 2023. The econometric techniques used are effective in accounting for both cross-sectional dependence and heterogeneity in the data. In summary, our findings align with the theoretical models that posit bidirectional causality as the most probable explanation of the mechanism driving investment and saving. More specifically, they are consistent with post-Keynesian (demand-led) assumptions describing an open economy operating below its maximum potential growth rate within a current account solvency constraint. Full article

This paper investigates the impact of global EPU and China’s EPU on China’s FDI inflows, examining whether financial development and political stability moderate these relationships. Using panel data from 212 countries spanning 2009 to 2022, we first establish causal direction through Granger causality tests, then employ instrumental variable estimation to address endogeneity concerns, while conducting heterogeneity analysis across development levels and Belt and Road Initiative participation. We find that both global and domestic EPU significantly reduce China’s FDI inflows, with a 1% increase in China’s EPU leading to a 0.083% decrease in FDI inflows. However, political stability and financial development serve as effective moderators, reducing EPU’s negative impact by up to 60% and 70%, respectively. The effects vary substantially across investor countries: non-developed countries show ten times stronger sensitivity to EPU than developed countries, while Belt and Road Initiative countries demonstrate 86% lower sensitivity than non-BRI countries. This research advances EPU–FDI theory by demonstrating how institutional quality creates “policy buffers” against uncertainty and provides policymakers with evidence that strengthening political stability and financial development can maintain investor confidence during uncertain periods, while strategic international partnerships can insulate investment flows from policy volatility. Full article

Amid escalating environmental crises—ranging from biodiversity loss to climate instability—the circular economy has emerged as a promising pathway to align economic growth with ecological limits. The objective of this study is to examine the asymmetric impact of a novel composite circular economy index (CEI)—constructed via entropy weighting—on the load capacity factor (LCF), a holistic sustainability metric, across 27 EU member states over 2010–2023. Employing the method of moments quantile regression (MMQR) and controlling for GDP, foreign direct investment, trade openness, employment, and population growth, the main findings indicate pronounced heterogeneity: positive CEI shocks yield a 1.219 percent increase in LCF at the 90th quantile versus just 0.229 percent at the 10th, revealing a “sustainability premium” for high-performing economies, while negative shocks inflict a −5.253 percent decline at the 90th quantile, exposing their greater vulnerability. Low-LCF countries, by contrast, display relative resilience to downturns, likely due to less entrenched circular systems. Panel Granger causality tests further reveal bidirectional feedback loops between LCF and economic growth, investment, and labor markets, alongside a unidirectional effect from trade openness to enhanced sustainability. These insights carry clear policy implications: high-LCF nations require safeguards against circularity backsliding, whereas low-LCF members need capacity-building to convert latent resilience into sustained gains—together forming a nuanced blueprint for achieving the EU’s 2050 climate-neutrality ambitions. Full article

This paper investigates the relationship between economic freedom and economic growth in Latin America and the Caribbean over the period 1997–2023, using data from 14 countries. To capture the multidimensional nature of economic freedom, two widely recognized indices—Heritage and Fraser—are incorporated into an extended Solow-type growth model. The empirical strategy relies on a dynamic panel data approach using the Arellano–Bond estimator, which allows for the control of unobserved heterogeneity, autocorrelation, and potential reverse causality. Robustness is assessed through alternative model specifications and in-sample forecasting using rolling-window techniques and Theil’s U-statistic. The results reveal a negative and statistically significant relationship between economic growth and the Heritage Index, while the Fraser Index shows a positive but generally non-significant effect. These findings highlight the methodological sensitivity of the economic freedom–growth nexus and suggest that context-specific institutional factors may shape how liberalization policies translate into development outcomes. The study contributes to the literature by jointly evaluating the impact of both indices in a unified dynamic framework, providing new evidence for a region marked by institutional heterogeneity and growth volatility. Full article

Large-scale photovoltaic (PV) development has been widely promoted in northwest China and has yielded notable economic and industrial outcomes. However, the existing literature has not adequately examined the relationship between large-scale PV development and regional economic growth, particularly in high-altitude and ecologically fragile areas. This study selects eight prefecture-level cities in Qinghai Province from 2014 to 2023 and employs a static fixed-effects panel regression model to empirically investigate the association between solar PV generation and regional economic performance. The findings indicate a significant positive correlation between PV power generation and regional GDP, with clear regional heterogeneity. In developed regions, the association is stronger, while in less developed regions, the effect is positive but comparatively weaker. Furthermore, the analysis reveals a nonlinear (inverted U-shaped) relationship between PV generation and economic growth in less developed areas, with a critical threshold beyond which the marginal economic benefit declines. These results provide empirical insights into optimizing PV development strategies based on local economic conditions. Notably, the study focuses on identifying statistical associations rather than establishing causality. Full article