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Purpose: The chapter analyses the diversity of the European Union (EU) member states in terms of the transition to a sustainable, green, and just economy. Need for the study: Sustainable development is an important concern that the EU approaches by aiming to transition to a greener economy, fairly and inclusively. Moreover, the actual context, post-pandemic period and ongoing war at the EU border, makes the social and economic development of the EU countries matter even more in the light of this just transition. Methodology: The authors relied on a multidimensional approach, using principal component analysis (PCA) to reduce the dimensionality of the dataset. The cluster analysis allowed us to group the countries in such a way that made it possible to identify the best and worst performers, as well as certain patterns that can be the basis for the formulation of good practices and transferable to the states that need more support in the transition to a green economy. Findings: The results indicated that EU member states can be grouped into five clusters, each needing specific policies to ensure sustainable and inclusive development. Denmark, Finland, and Sweden turned out the best performers, while Estonia, Lithuania, Bulgaria, and Romania proved to have the most unfavourable situation. Practical implications: The findings provide relevant policy implication insights for policy decision-makers in the field of green economy, economic development, and social policies, with directions for future research. [ABSTRACT FROM AUTHOR]

Purpose: The paper aims at addressing the following research questions: does institutional quality improve countries' environmental efficiency? And which pillars of institutional quality improve countries' environmental efficiency? Design/methodology/approach: By specifying a directional distance function in the context of stochastic frontier method where GHG emissions are considered as the bad output and the GDP is referred as the desirable one, the work computes the environmental efficiency into the appraisal of a production function for the European countries over three decades. Findings: According to the countries' performance, the findings confirm that high and upper middle-income countries have higher environmental efficiency compared to low middle-income countries. In this environmental context, the role of institutional quality turns out to be really important in improving the environmental efficiency for high income countries. Originality/value: This article attempts to analyze the role of different dimensions of institutional quality in different European countries' performance – in terms of mitigating GHGs (undesirable output) – while trying to raise their economic performance through their GDP (desirable output). Highlights: The paper aims at addressing the following research question: does institutional quality improve countries' environmental efficiency? We adopt a directional distance function in the context of stochastic frontier method, considering 40 European economies over a 30-year time interval. The findings confirm that high and upper middle-income countries have higher environmental efficiency compared to low middle-income countries. The role of institutional quality turns out to be really important in improving the environmental efficiency for high income countries, while the performance decreases for the low middle-income countries. [ABSTRACT FROM AUTHOR]

The subject-matter of this paper is the economic situation in selected Eurasian countries affected by armed conflict at the turn of the 21st century. The aim of the paper is to assess the strength and impact of such conflict on the economic development of the affected countries from its outbreak until 2022.

This article provides an in-depth analysis of the evolution and current state of industrial policies in the European Union (EU) from the 1980s to the present day. We specifically focus on the resurgence of interest in such policies from 2020. We argue that industrial policies in the EU during the second half of the 2020s and into the 2030s will differ significantly from previous decades, while acknowledging challenges in fully understanding their scope and implementation. In particular, it is argued that the lack of a meaningful EU fiscal capacity constitutes the biggest challenge for the design and implementation of effective industrial strategies, which risks exacerbating regional and national disparities in the dual transition. [ABSTRACT FROM AUTHOR]

Digital transformation is changing the innovation landscape, not only of firms but also at the macro level. This study aims to analyse how configurations of European Union countries’ innovation inputs that lead to innovation outputs are affected by the levels of national digital transformation. A novel configurational moderation approach is adopted to assess the impact of digital transformation on the 27 EU countries’ national systems of innovation (NSI). Results showed that the presence of all innovation inputs is a sufficient configuration for the presence of high innovation outputs, while three different configurations were found to be sufficient for its absence. The configurational moderation analysis revealed that digital transformation effectively moderates the arrangement of innovation inputs leading to the presence of high innovation outputs, where the human capital and research pillar loses its importance. The results of this study can be understood as benchmarks, against which less innovative countries may compare and develop their NSI. They also shed light on the specific configurations followed by each EU country in achieving innovation outputs, which could be an input for Union-based policies directed at the development of concrete innovation pillars in specific Member States. Furthermore, findings enlighten international business managers about the strengths and weaknesses of EU countries’ NSI, which may aid them in their internationalisation decisions.

In recent years, Supermultiplier models have attracted rising attention, highlighting the role of autonomous components of demand in shaping the long-run growth path of the economy. This paper aims to empirically test the implications of this approach in selected European economies, grouped according to the literature on welfare model classification. First, we outline the short-run adjustments and long-run relations between autonomous demand growth and output by estimating a vector error-correction model (VECM). Second, we assess if a causal relationship between the variables can be identified by estimating a structural model and computing the orthogonalized impulse response functions, focusing in particular on the effects of a demand shock on output. The empirical results confirm a positive and significant relation between autonomous demand and output in the long run for all countries considered. Moreover, we find that the causal direction runs from the former to the latter, corroborating the idea that autonomous demand shocks permanently affect the growth path of the economies under scrutiny. [ABSTRACT FROM AUTHOR]

The sudden impact of the Covid-19 global pandemic threw societies into crisis, with their capacity to respond effectively dependent on existing public infrastructure. This article examines the case of Germany and its large public development bank, the KfW, during the pandemic. This paper argues that the KfW’s pandemic responses substantiate the bank as ‘essential public infrastructure’ and, moreover, as one that can function according to public purpose. That is, the KfW functions were essential to enabling society to respond to Covid-19 according to public purpose that was in the public interest. The lessons of the KfW, Covid-19, and public purpose have relevance to the future of public development bank financing of green and just transitions. [ABSTRACT FROM AUTHOR]

The paper examines the convergence of tax systems in Central and Eastern European countries (CEECs) over the period 1995–2018. Due to the increasing impact of tax competition, we have focused on income taxes, in particular, corporate ones. We have identified the factors that influence the taxation system and trends in income taxation in the CEECs by adapting the hidden Markov model approach. We find that many CEECs have reduced income taxation in the analysis period, mainly by lowering tax rates. Corporate income taxes have also decreased in many CEECs in the same period; however, the reverse has been observed too. Both convergence and divergence have been identified among the CEECs over the period considered. The speed of these processes based on the used variables varied depending on both exogenous and endogenous factors. These factors have been diagnosed as being specific to the periods of tax reforms, i.e., before and after accession to the European Union (EU) and the global financial crisis.

Innovation networks help to create innovation ecosystems by strengthen interactions between government, academia, business, and special institutions. The purpose of the article is to identify the relationship between the local context, i.e., the conditions and environment in which the Local Government Unit operates and their participation in the innovation networks. The analysis is based on a survey of 184 local government authorities in Poland, Local Administrative Unit level 2. The present study examines the hypothesis that the more supportive the local context is in the Polish municipalities and cities on district rights, the greater the engagement of local government authorities in local or regional innovation networks. The supportive local context was defined by a set of institutional, economic, geographical, demographic, cultural, political, managerial, and administrative factors. The research findings indicate that the key factors that influence the engagement of local government in local or regional innovation networks are institutional factors.

The purpose of this paper is to explore how the travel habits of Ukrainian tourists changed after the beginning of the 2022 war in Ukraine in comparison to the year 2021. The theoretical part of the paper discusses the impacts of war on tourism; in the empirical part, the secondary and the primary research on the Ukrainians’ travel habits before and during the war is performed. The research gives an insight into the frequency of travelling, planned spending on travel, ethnic dilemmas on travelling, and travel destinations. The research is essential in the context of war and post-war periods for understanding the psychological and behavioral effects, assessing economic consequences, addressing destination marketing and recovery efforts, and facilitating reconciliation and social integration. Research limitations include the scope and generalizability of the findings, self-reporting biases, causality and temporal issues, and limited timeframe and context.

This study empirically investigates the existence or not of Environmental Kuznets Curve (EKC) hypothesis in Nordic and Non-Nordic European countries, with carbon dioxide emissions (and ecological footprint for robustness tests) as proxy of environmental quality. The data are spanning from the years 2005–2019 and covering 22 countries. Using the Gross National Income per capita as measure of economic growth, we show on one hand as first contribution that initially, EKC hypothesis is significantly not valid in the full sample. Interestingly, when taking the Economic Complexity into account, our results show evidence of a consistent leveraging effect that changes the U-Shaped into an inverted U-Shaped structure. As second contribution, a step forward into our results with quantile analysis shows evidence of a significant countries’ threshold effect only in median and upper quantiles where the EKC hypothesis is confirmed. On the other hand, a first disaggregation of the sample into Nordic and Non-Nordic European countries, show no evidence of EKC structure among the two sub-groups. Nevertheless, a further disaggregation based on Euro zone currency criteria, show as third contribution that Euro zone countries are characterized by a U-Shaped structure whether Nordic or Non-Nordic, contrary to an inverted U-Shaped structure for Non-Nordic countries belonging to Non-Euro zone. Policy implications are discussed.

The European Green Deal is a comprehensive strategy aiming to fully decarbonize the economy by 2050, with a key target of a 55 % reduction in carbon emissions by 2030. This study contributes to the debate around the European Green Deal by providing insights from different dynamic stochastic general equilibrium models for the six largest European countries and the Union itself. We discuss four policy targets consistent with a 55 % emissions cut by 2030, using carbon prices as the main policy tool. The study reveals that defining fair climate targets for a group of relatively heterogeneous countries like the European ones is challenging. Simple approaches, such as achieving the same CO2 emissions per capita in 2030 or the same emissions over GDP, lead to vastly different policy efforts measured by carbon prices and welfare losses in our model.Implementing a common set of climate policies and tools defined by the European Commission may seem fair, but it results in varying impacts on emissions across countries. The same carbon price has an asymmetric effect on emissions and welfare. Alternatively, achieving the same emission reduction requires different carbon prices for different countries. For example, Spain needs a carbon price of 151 €/tCO2, while Poland only needs 71 €/tCO2 to achieve the target. This asymmetry sparks a debate on determining the right climate target for each country. The article aims to open this discussion rather than provide a definitive answer.

It is increasingly being recognized that different types of entrepreneurs exist with different performance levels and different contributions to the economy. Two common classifications of entrepreneurship types are based on professional status and start-up motive, where independent own-account workers are assumed to perform better than dependent self-employed and opportunity entrepreneurs are assumed to perform better than necessity entrepreneurs. However, these supposed performance differentials are seldomly tested or quantified. Using recent data drawn from the European Working Conditions Survey for the EU-28, we explore self-employment earnings (as an indicator of performance) across these different entrepreneurship types. Our results from OLS and multilevel linear regressions show that dependent self-employed workers are indeed observed to have significantly lower earnings than independent own-account workers, but the difference is only 10%, suggesting that the precarious nature of the dependent self-employed may be overstated in certain policy circles. Regarding start-up motive, our paper highlights the importance of distinguishing the group of entrepreneurs who simultaneously have both opportunity and necessity motives to start a business. [ABSTRACT FROM AUTHOR]

Using a survey with 57 German firms, we evaluate the level of digitalization of the human resource management (HRM) function and document perceived benefits and barriers of technology adoption from organizational and individual users' perspectives. The results give reason for optimism. Most of the companies report that the core HR processes are digitized. We do not observe adverse effects of the digital HRM tools on users' job satisfaction and work stress. Still, more than half of companies do not yet use digital tools for strategic HRM decisions. Respondents appreciate the increased speed and cost-efficiency of digital HR processes and associate them with a competitive advantage in talent acquisition. The most prominent barriers to adoption are lack of qualified professionals, high costs, and uncertainty regarding the legal framework. Additionally, we test whether small- and medium-sized enterprises differ systematically from larger organizations in how they use digital HRM tools. [ABSTRACT FROM AUTHOR]