The European Union’s environmental goal by 2050 is to become the first climate-neutral continent in the world. This means specific efforts for diversifying the energy mix and investing in low-carbon energy. Our study investigates the nexus among carbon emissions, energy consumption and mix, and economic growth in a modified framework that includes the contribution of inward foreign direct investments and international trade to lowering air pollution. We have used a two-step approach to explore in more detail the links between these variables in 24 EU countries over the period 1995–2018, followed by a panel VECM analysis. Our results indicate that there is a unidirectional link between economic growth and CO2 emissions, which should imply a decoupling of environmental improvement measures from the pace of economic growth. We also find bidirectional causal relationships between low-carbon energy shares in consumption and CO2 emissions, as well as between low-carbon energy share in consumption and GDP per capita, which confirms both pollution haven and the halo effect hypotheses for FDI on gas emissions. However, in the long term, FDI, exports, and imports have positively impacted the reduction in CO2 emissions; therefore, stronger EU investment and trade integration should be promoted to improve the quality of the environment.

The paper explores the relationship between education, digitalization, and financial development between 1996 and 2019 with the aim of showcasing the differences between developed and emerging economies in Europe. We use a Bayesian VAR framework that includes variables related to education, digitalization, and financial development, as well as several endogenous variables to control for differences between countries in terms of nominal GDP growth, unemployment rate, and trade openness. Our findings clearly demonstrate the dynamic interdependence between financial development—including its two main components, financial institutions, and financial markets, digitalization, and education. Furthermore, we find that education is a leading variable in the financial development–education–digitalization nexus, whereas financial development and digitalization are laggard variables. These findings open possibilities for influencing joint policies on digitalization, education, and financial development, particularly in emerging European countries.

The automotive industry is one of the key drivers of economic growth in countries in Central and South-Eastern Europe, with contributions of up to 15% of gross domestic product. At the same time, the automotive industry is at the heart of key transformations: new technologies on the horizon at the verge of the global “green deal”; supply chain uncertainties because of the effects of pandemics in Asia; and unpredictable demand side factors ranging from purchasing power to consumer preferences. These aspects, coupled with large, fixed investments and costly distribution channels, put the industry at the core of (radical) change initiatives. Ahead of these changes, our paper investigated the presence of firm, industry, and country effects on the profitability of firms in the automotive industry in Central, Eastern and South-Eastern European countries, considering different industry definitions and firm size. We found that firm effects are significant for profitability variation across companies, but differ in intensity based on the size of the company, which signals that firm size matters significantly as a driver of operational profitability, as it is converted into sustained competitive advantages. While industry effects bear very little significance for profitability variation in the automotive industry, our most surprising finding was that country effects are important for profitability and have more of an impact for smaller companies. This may be the consequence of “historical” factors that led to large Original Equipment Manufacturers setting up their manufacturing facilities in the region, but also of specific economic policies in the form of state aid addressed to the automotive industry. Keywords: automotive industry, profitability, Central and South-Eastern Europe, variance components, industry effects, country effects