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The Impact of Economic Freedom on Economic and Environmental Performance: Evidence from European Countries

Author

Listed:
  • Jonas Rapsikevicius

    (School of Economics and Business, Kaunas University of Technology, 44239 Kaunas, Lithuania)

  • Jurgita Bruneckiene

    (School of Economics and Business, Kaunas University of Technology, 44239 Kaunas, Lithuania)

  • Mantas Lukauskas

    (Faculty of Mathematics and Natural Sciences, Kaunas University of Technology, 44239 Kaunas, Lithuania)

  • Sarunas Mikalonis

    (School of Economics and Business, Kaunas University of Technology, 44239 Kaunas, Lithuania)

Abstract

The EU Green Deal and its impact on economic transformation provoked a slightly forgotten free market vs. market regulation discussion, but in the light of a new context—economic and environmental performance development. The economic shock caused by COVID-19, which transformed economies and societies, intensified this discussion. This article analyses the impact of economic freedom on economic performance and environmental performance in European countries. The article contributes to a gap in the literature, because, to date, research has examined the effects of economic freedom, or some of its components, on economic or environmental measures in groups of nations with a lacking sustainable development context. In addition, the mixed results obtained led to confusion in perceptions and knowledge about the influence and usefulness of economic freedom for economic and environmental performance. We also found mixed results regarding the influence of economic freedom on economic and environmental performance, but the introduction of a new concept—the optimal level of economic freedom—organized the different results into a coherent logical sequence. The paper provides original empirical evidence and specifies the targets of structural reforms. The results are thus useful for policymakers to develop more appropriate and efficient economic freedom.

Suggested Citation

  • Jonas Rapsikevicius & Jurgita Bruneckiene & Mantas Lukauskas & Sarunas Mikalonis, 2021. "The Impact of Economic Freedom on Economic and Environmental Performance: Evidence from European Countries," Sustainability, MDPI, vol. 13(4), pages 1-20, February.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:4:p:2380-:d:504103
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    2. Djula Borozan, 2023. "Institutions and Environmentally Adjusted Efficiency," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(4), pages 4489-4510, December.
    3. Hsu, Ching-Chi & Ngo, Quang-Thanh & Chien, FengSheng & Li, Li & Mohsin, Muhammad, 2021. "Evaluating green innovation and performance of financial development: mediating concerns of environmental regulation," MPRA Paper 109671, University Library of Munich, Germany.
    4. Wei Wang & Kehui Wei & Oleksandr Kubatko & Vladyslav Piven & Yulija Chortok & Oleksandr Derykolenko, 2023. "Economic Growth and Sustainable Transition: Investigating Classical and Novel Factors in Developed Countries," Sustainability, MDPI, vol. 15(16), pages 1-15, August.
    5. Borozan, Dj, 2022. "Asymmetric effects of policy uncertainty on renewable energy consumption in G7 countries," Renewable Energy, Elsevier, vol. 189(C), pages 412-420.
    6. Cornel Zamfirescu & Andrei Cotirla, 2024. "The New Model of Sustainable Development and Economic Performance at European Level in the Current Geopolitical Context," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 2, pages 115-125.
    7. Awoa Awoa, Paul & Oyono, Jean Cedric & Ngah Atangana, Bénédicte & Okere Atanga, Donald & Zeh, Inès Perolde, 2022. "Natural resource and entrepreneurship: Economic freedom matters," Resources Policy, Elsevier, vol. 79(C).
    8. Xiumei Xu & Ruolan Jing & Feifei Lu, 2022. "Environmental Regulation, Corporate Social Responsibility (CSR) Disclosure and Enterprise Green Innovation: Evidence from Listed Companies in China," IJERPH, MDPI, vol. 19(22), pages 1-24, November.
    9. Elena C. Prenovitz & Peter K. Hazlett & Chandler S. Reilly, 2023. "Can Markets Improve Recycling Performance? A Cross-Country Regression Analysis and Case Studies," Sustainability, MDPI, vol. 15(6), pages 1-18, March.
    10. Yu-Xia Tu & Oleksandr Kubatko & Vladyslav Piven & Bohdan Kovalov & Mykola Kharchenko, 2023. "Promotion of Sustainable Development in the EU: Social and Economic Drivers," Sustainability, MDPI, vol. 15(9), pages 1-15, May.
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    12. Gamze Sart & Yilmaz Bayar & Marina Danilina & Funda Hatice Sezgin, 2022. "Economic Freedom, Education and CO 2 Emissions: A Causality Analysis for EU Member States," IJERPH, MDPI, vol. 19(13), pages 1-14, June.
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