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Economic Complexity as a Determinant of Green Development in the Central and Eastern European (CEE) Countries

Author

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  • Neagu Olimpia

    (“Vasile Goldiș” Western University of Arad, Romania University of Oradea, Romania; Romanian Academy of Scientists, Bucharest, Romania)

  • Neagu Mădălin-Ioan

    (Technical University of Cluj-Napoca, Romania)

Abstract

The paper analyses the determinants of green development in the Central and Eastern European (CEE) countries pointing out the influence of the sophistication of productive structure and exported goods (economic complexity). The study uses OECD data regarding green development, World Bank Indicators, World Penn Table Data, and MIT Harvard data covering the period of 1996 to 2020, in a heterogeneous panel approach. Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) models are estimated in order to express the influence on green development of the economic complexity index, KOF globalization index, renewable energy consumption, human capital index, and a constructed institutional quality index (computed by using the Principal Component Analysis based on data from World Governance Indicators). All considered variables have a validated statistical influence on green growth in both models. The Dumitrescu-Hurlin causality test revealed a bidirectional causal relationship between institutional quality and green growth and unidirectional ones from economic complexity, human capital and renewable energy to green development and from green development to globalization. Policy implications are also provided.

Suggested Citation

  • Neagu Olimpia & Neagu Mădălin-Ioan, 2024. "Economic Complexity as a Determinant of Green Development in the Central and Eastern European (CEE) Countries," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 34(3), pages 108-132.
    • Handle: RePEc:vrs:suvges:v:34:y:2024:i:3:p:108-132:n:1005
    DOI: 10.2478/sues-2024-0015
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    More about this item

    Keywords

    green growth; economic complexity; globalization; human capital; renewable energy; panel data;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F64 - International Economics - - Economic Impacts of Globalization - - - Environment
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O - Economic Development, Innovation, Technological Change, and Growth
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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