Economies

16 pages, 2392 KB

Open AccessArticle

Bayesian Time-Series Analysis on Retreating Economic Freedom: Is There a Democratic Crisis of Liberalism?

by Bodo Herzog

Economies 2026, 14(1), 34; https://doi.org/10.3390/economies14010034 - 22 Jan 2026

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This study examines the dynamics of economic freedom in nine advanced democracies in comparison to China over the 1970–2022 period. Using data from the Fraser Institute and the Manifesto Project Database, we apply a Bayesian time-series methodology to identify three key patterns. First, [...] Read more.

This study examines the dynamics of economic freedom in nine advanced democracies in comparison to China over the 1970–2022 period. Using data from the Fraser Institute and the Manifesto Project Database, we apply a Bayesian time-series methodology to identify three key patterns. First, economic freedom in China has exhibited a sustained increase since the 1980s. Second, by contrast, liberal democracies in advanced economies show a decline in economic freedom since the turn of the millennium. Third, evidence from party manifestos indicates a rising prevalence of de-growth-oriented political preferences in democratic economies over the past decade. As a potential avenue for future research, we propose framing economic freedom as a public good, in line with Hayekian principles. Overall, the study provides a descriptive foundation of the relationship between economic freedom, political preferences, and economic performance. Full article

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19 pages, 739 KB

Open AccessArticle

The Hidden Costs of Trade: Institutional and Cultural Determinants of Export Efficiency for Vietnam’s Wood Products

by Phong Nguyen, Xuan Uyen Tran and Bonoua Faye

Economies 2026, 14(1), 33; https://doi.org/10.3390/economies14010033 - 22 Jan 2026

Viewed by 167

Abstract

Vietnam’s wooden forest products industry is an important export sector, contributing to industrial growth and employment. However, it is facing increasing pressures related to challenges such as forest and export sustainability. Despite its potential, Vietnam’s export performance remains uneven across destination markets, related [...] Read more.

Vietnam’s wooden forest products industry is an important export sector, contributing to industrial growth and employment. However, it is facing increasing pressures related to challenges such as forest and export sustainability. Despite its potential, Vietnam’s export performance remains uneven across destination markets, related to the presence of significant unrealized trade potential. This study examines the determinants of export efficiency in Vietnam’s wooden forest products sector by moving beyond traditional gravity variables to incorporate institutional and cultural dimensions. Using a panel of 70 trading partners between 2004 and 2023, covering more than 93% of Vietnam’s total wood exports, this study employs an instrumental-variable single-stage stochastic frontier gravity model (IV-SFGM) to estimate trade potential. The results show that economic size, favorable exchange rates, and shared borders significantly enhance export performance. Furthermore, geographical distance and land enclosure remain persistent structural barriers, particularly relevant for bulky and logistics-intensive wood products. Institutional and cultural distance constitute substantial non-tariff barriers, significantly reducing export efficiency across markets. Conversely, regional trade agreements, trade freedom, and foreign direct investment play a critical role in mitigating inefficiencies and facilitating market penetration. Export efficiency in Vietnam’s wooden forest products sector indicates considerable improvement, rising from approximately 25% in the mid-2000s to over 55% in recent years, indicating notable progress in the market and highlighting considerable untapped potential. So, integrating institutional and cultural factors into a frontier-based gravity framework, this study offers novel empirical evidence from an emerging, biodiversity-rich economy with evolving governance institutions. The findings provide important policy implications for aligning export growth with institutional reform and trade liberalization, thereby contributing to the achievement of SDGs such as Decent Work and Economic Growth. Full article

(This article belongs to the Section Growth, and Natural Resources (Environment + Agriculture))

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25 pages, 927 KB

Open AccessArticle

Trade and Permanent Growth with Domestic and Foreign Capital Goods, and International Capital Movements

by Thomas H. W. Ziesemer

Economies 2026, 14(1), 32; https://doi.org/10.3390/economies14010032 - 21 Jan 2026

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Abstract

Domestic and foreign capital and consumption goods are imperfect substitutes in production and demand functions of the growth model by Bardhan–Lewis. We extend the model by introducing exogenous technical progress and allow for foreign debt dynamics without dropping domestic capital goods. Trade and [...] Read more.

Domestic and foreign capital and consumption goods are imperfect substitutes in production and demand functions of the growth model by Bardhan–Lewis. We extend the model by introducing exogenous technical progress and allow for foreign debt dynamics without dropping domestic capital goods. Trade and growth are mutually affecting each other. Trade may speed up or decrease growth in theory with and without technical progress in comparison with the Solow–Swan model. Steady-state growth rates include that of world income, and the income and price elasticities of export demand. The dynamic process of the economy is analyzed in terms of exports and foreign debt, and both as a share of a stock of imported capital goods. There are multiple steady states where imported capital goods are paid for by high exports and debt, low debt and low exports, or even negative debt and low exports. A stable VAR with data for Brazil shows that the high-debt steady state is relevant for this country. Steady states with high and low debt are saddle-point stable and the steady-state medium debt is stable. Neoclassical standard results appear as two special cases. We link the model to several strands of literature. Full article

(This article belongs to the Special Issue Dynamic Macroeconomics: Methods, Models and Analysis)

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28 pages, 2666 KB

Open AccessArticle

Nonlinear Dynamics of AI Investment and Economic Growth in Germany: Evidence from a NARDL Approach

by Seyed Alireza Athari, Mario Edmond Sassine, Eric Tieku Agyemang, Dervis Kirikkaleli and Chafic Saliba

Economies 2026, 14(1), 31; https://doi.org/10.3390/economies14010031 - 21 Jan 2026

Viewed by 339

Abstract

This study aims to examine the impacts of AI investment on economic growth, while controlling for labor force participation and gross fixed capital formation in Germany. The analysis is based on data collected on the state of economic development in Germany from the [...] Read more.

This study aims to examine the impacts of AI investment on economic growth, while controlling for labor force participation and gross fixed capital formation in Germany. The analysis is based on data collected on the state of economic development in Germany from the first quarter of 2012 to the fourth quarter of 2022. The study used a nonlinear ARDL bounds approach for these investigations. The outcomes clearly reveal that positive shocks to labor force participation and investment in AI significantly enhance economic growth (GDP) in Germany, whereas a positive shock to gross fixed capital formation (GFCF) has no considerable effect on economic growth. Likewise, negative shocks to gross fixed capital formation and AI investment increase GDP growth. Negative shock to the labor force reduces GDP growth. Recommendations are made that Germany must maintain its measured approach while offering long-term commitment. More spectacular AI expenditure increases are not required; prioritize steadiness and integration. Establish long-time-horizon AI development partnerships between government, universities, and industry with stable funding streams on long-term horizons. The fragile link between traditional capital formation and growth means that Germany needs to redefine productive investment. Full article

(This article belongs to the Special Issue Innovation, Productivity, and Economic Growth: New Insights—2nd Edition)

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32 pages, 899 KB

Open AccessArticle

Integration into Global Value Chains: Evidence from Mexico, 1995–2020

by Luisa Rivera-Basques and María Fernanda Higuera-Cota

Economies 2026, 14(1), 30; https://doi.org/10.3390/economies14010030 - 21 Jan 2026

Viewed by 216

Abstract

This paper examines Mexico’s integration into Global Value Chains (GVCs) and its implications for structural change over the period 1995–2020. Using a multiregional input–output framework, the analysis decomposes gross exports into domestic and foreign value added and combines these indicators with weighted forward [...] Read more.

This paper examines Mexico’s integration into Global Value Chains (GVCs) and its implications for structural change over the period 1995–2020. Using a multiregional input–output framework, the analysis decomposes gross exports into domestic and foreign value added and combines these indicators with weighted forward and backward production linkages to assess the relationship between sectoral GVC participation patterns and sectors’ roles within the domestic production structure. The results show that Mexico’s integration into GVCs has been characterized by strong and persistent backward participation, reflecting a high dependence on imported intermediate inputs, alongside comparatively lower and more stable forward participation. Multi-stage integration has been particularly relevant in a limited number of manufacturing activities—most notably in the automotive sector—both in terms of its contribution to domestic value added and its dynamism. However, this form of integration has remained highly concentrated, and changes in sectoral GVC participation have not translated into generalized shifts in the dynamic hierarchy of sectors. Sectoral roles within the production structure exhibit a high degree of persistence over time, with only a small number of nongeneralized cases of upgrading. By jointly examining GVC participation typologies and sectoral linkage dynamics, the paper contributes to bridging trade-in-value-added analyses and structuralist approaches to productive change. From a policy perspective, while the results do not establish causal relationships, they point to differentiated structural patterns with relevant implications for industrial policy. Overall, the analysis suggests that deeper integration into GVCs, in the absence of targeted industrial policies, does not by itself guarantee structural transformation or sustained gains in domestic value added. Full article

(This article belongs to the Section International, Regional, and Transportation Economics)

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18 pages, 294 KB

Open AccessArticle

Digital Production Investments and Financial Outcomes: A Baltic and Rest of Europe Comparison

by Aiste Lastauskaite

Economies 2026, 14(1), 29; https://doi.org/10.3390/economies14010029 - 21 Jan 2026

Viewed by 137

Abstract

This study provides new evidence on how production digitalization investment affects firm financial performance across diverse European regions. A panel of 14,935 firm-year observations from 30 countries (2012–2022), including a focused Baltic subsample, is used alongside a refined digital capital intensity metric based [...] Read more.

This study provides new evidence on how production digitalization investment affects firm financial performance across diverse European regions. A panel of 14,935 firm-year observations from 30 countries (2012–2022), including a focused Baltic subsample, is used alongside a refined digital capital intensity metric based on depreciated plant and machinery value. The results indicate a positive association between digital investment and operating revenue across Europe, with significantly stronger effects observed in the Baltic region. Interaction models reveal higher marginal returns for Baltic firms, suggesting that digital capital delivers amplified value in economies with lower digital saturation but greater absorptive urgency. Employee-related costs consistently predict revenue outcomes, underscoring their role in translating digital assets into performance. Intangible fixed assets exhibit a positive impact in Baltic labor-scale models but weaker effects elsewhere, indicating that institutional maturity mediates knowledge capital productivity. Implications: (1) digital investment yields asymmetric returns; (2) workforce investment enhances digital ROI; and (3) policy should prioritize organizational readiness alongside infrastructure. This study contributes by introducing a replicable proxy for production-level digitalization and by providing rare comparative evidence on digital returns in transitional versus mature European economies. Full article

(This article belongs to the Section Macroeconomics, Monetary Economics, and Financial Markets)

18 pages, 717 KB

Open AccessArticle

Spending on Education, Human Capital, and Economic Growth in Central America: A Panel Data Analysis with Driscoll-Kraay Standard Errors

by José Rodolfo Sorto-Bueso, Juan Jacobo Paredes Heller and Roldán Hernán Villela Morales

Economies 2026, 14(1), 28; https://doi.org/10.3390/economies14010028 - 20 Jan 2026

Viewed by 298

Abstract

The main purpose of this study is to assess the effect of current public expenditure on education and human capital on economic growth in Central America between 1992 and 2021. In this context, data on education spending and human capital for Guatemala, Honduras, [...] Read more.

The main purpose of this study is to assess the effect of current public expenditure on education and human capital on economic growth in Central America between 1992 and 2021. In this context, data on education spending and human capital for Guatemala, Honduras, El Salvador, Nicaragua, and Costa Rica were analyzed using a panel data approach with Driscoll–Kraay standard errors. The time series were primarily obtained from the online databases of the World Bank, UNESCO, and national public sources. The results show a positive and significant effect of current education expenditure and human capital formation on the economic growth of Central America. This research provides empirical evidence on a topic that has been scarcely examined in the Central American regional context, and its findings constitute relevant input for scholars, practitioners, and policymakers. Full article

(This article belongs to the Special Issue Advances in Applied Economics: Trade, Growth and Policy Modeling)

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25 pages, 1204 KB

Open AccessArticle

Sustainable Economic Dynamics in Europe: Confirming the Role of Structural Intellectual Capital Using PCA, Panel ARDL, PSTR and SEM-PLS Models

by Nour Fakhreddine, Hanadi Taher and Abbas Mourad

Economies 2026, 14(1), 27; https://doi.org/10.3390/economies14010027 - 20 Jan 2026

Viewed by 184

Abstract

This study examines the influence of social capital, intellectual capital, resource rents, and investment capital on the economic performance of the 18 member states of the European Union from 2005 to 2022. Principal component analysis and factor analysis are employed to construct composite [...] Read more.

This study examines the influence of social capital, intellectual capital, resource rents, and investment capital on the economic performance of the 18 member states of the European Union from 2005 to 2022. Principal component analysis and factor analysis are employed to construct composite measures of social and intellectual capital. The empirical model integrates static panel estimations with Monte Carlo simulations and Panel Smooth Transition Regression (PSTR) to examine nonlinear and regime-dependent growth functions. Investment capital exerts a greater influence on growth when intellectual capital is above a certain threshold, but social capital and resource rents exhibit diverse effects across various regimes; this is consistent with semi-endogenous growth models. In regimes with low intellectual capital, resource rents adversely influence growth, consistent with the resource curse concept; however, this effect diminishes as intellectual capital rises. Finally, partial least squares structural equation modeling indicates that social capital, investment capital, and resource rents influence economic growth, with this effect mediated by intellectual capital. The findings underscore the necessity for the European Union to cultivate and enhance knowledge-based assets while reducing reliance on resource rents to achieve more resilient and sustainable economic development. Full article

(This article belongs to the Special Issue Economic Development in the European Union Countries)

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17 pages, 502 KB

Open AccessArticle

Do Monetary Policy Shocks Affect CO₂ Emissions? Evidence from Brazil

by Luccas A. Attílio, Joao R. Faria and Andre V. Mollick

Economies 2026, 14(1), 26; https://doi.org/10.3390/economies14010026 - 17 Jan 2026

Viewed by 236

Abstract

This paper examines whether monetary policy shocks affect CO₂ emissions over time in Brazil. We show that CO₂ emissions decline persistently following contractionary monetary policy shocks. The relationship between monetary policy and CO₂ emissions in Brazil is assessed through two [...] Read more.

This paper examines whether monetary policy shocks affect CO₂ emissions over time in Brazil. We show that CO₂ emissions decline persistently following contractionary monetary policy shocks. The relationship between monetary policy and CO₂ emissions in Brazil is assessed through two channels: trade openness and exchange rates. The theoretical model illustrates how monetary policy affects the domestic economy through the real exchange rate. An application of a Global VAR (GVAR) to the Brazilian economy from 1996 to 2018 investigates the effects of monetary policy in Brazil (or in the U.S.) on real GDP and, subsequently, on CO₂ emissions. A contractionary monetary policy shock in Brazil causes a short-run appreciation of the currency, lower output in the long run, and lower CO₂ emissions (−0.02% after 24 months). A contractionary U.S. monetary policy shock also causes a decline in the stock market and a short-run depreciation of the currency. This shock leads to lower output in the long run, reducing CO₂ emissions by −0.01% after 20 months. Full article

(This article belongs to the Topic Critical Minerals in a Low-Carbon Future: Risk, Innovation, and Sustainability)

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19 pages, 313 KB

Open AccessArticle

Impact of Macro-Economic Factors on CEO Compensation: Evidence from JSE-Listed Banks

by Rudo Rachel Marozva and Frans Maloa

Economies 2026, 14(1), 25; https://doi.org/10.3390/economies14010025 - 16 Jan 2026

Viewed by 245

Abstract

The debate over CEO compensation persists despite extensive efforts by academics and technocrats to understand its determinants. Most research has focused on how firm-specific characteristics and CEO-specific traits influence CEO compensation. However, the results have been contradictory, indicating that other factors may also [...] Read more.

The debate over CEO compensation persists despite extensive efforts by academics and technocrats to understand its determinants. Most research has focused on how firm-specific characteristics and CEO-specific traits influence CEO compensation. However, the results have been contradictory, indicating that other factors may also play a role. This study examines the impact of macroeconomic factors on the compensation of CEOs. It examines how price variables such as interest rates, inflation, and exchange rates affect the fixed salaries and total compensation of CEOs at six South African banks listed on the Johannesburg Stock Exchange. Conducted over a 15-year period, this quantitative longitudinal study utilized secondary data from annual reports and the IRESS database. Panel data regression analysis was employed to interpret the data. The findings reveal a positive relationship between interest rates and fixed salaries, as well as between exchange rates and fixed salaries. Additionally, interest rates and total compensation are positively related, and exchange rates also have a positive relationship with fixed salaries. Understanding how macroeconomic conditions influence CEO pay helps Compensation Committees contextualize performance. It allows them to differentiate between achievement driven by a CEO’s abilities and that resulting from external factors, ensuring fair compensation and minimizing excessive rewards for “luck”. This knowledge supports the adjustment of incentive plans based on relative performance and economic-adjusted metrics, reducing the cyclical influence of macroeconomic variables on firm performance and, ultimately, CEO compensation. Full article

(This article belongs to the Special Issue Monetary Policy and Inflation Dynamics)

23 pages, 463 KB

Open AccessArticle

Trade, Growth, and Logistics Performance: Dynamic and Distributional Insights into the Drivers of CO₂ Emissions in the Mediterranean Basin

by Ioannis Katrakylidis, Athanasios Athanasenas, Michael Madas and Constantinos Katrakilidis

Economies 2026, 14(1), 24; https://doi.org/10.3390/economies14010024 - 15 Jan 2026

Viewed by 302

Abstract

This paper examines how logistics performance conditions the relationship between trade openness, economic growth and per capita CO₂ emissions in Mediterranean economies. Using an unbalanced panel of 20 countries over the period 2007–2022, we combine static fixed-effects, dynamic panel generalized method of [...] Read more.

This paper examines how logistics performance conditions the relationship between trade openness, economic growth and per capita CO₂ emissions in Mediterranean economies. Using an unbalanced panel of 20 countries over the period 2007–2022, we combine static fixed-effects, dynamic panel generalized method of moments (GMM) estimators and Method-of-Moments Quantile Regression (MM-QR). CO₂ emissions per capita, the World Bank Logistics Performance Index (LPI), trade openness and GDP per capita are drawn from World Bank databases, and interaction terms between LPI and both income and trade openness are constructed to capture conditional effects. The results from fixed-effects and system GMM estimations show that logistics performance exerts a robust and statistically significant negative effect on emissions, whereas GDP per capita is a positive driver and trade openness tends to reduce emissions when logistics capacity is sufficiently strong. Negative and significant interaction terms between LPI and both income and openness indicate that logistics efficiency amplifies the environmental benefits of trade and growth. Quantile regressions reveal that these patterns are most pronounced in high-emission countries, where improvements in logistics performance and its interaction with trade and income generate larger marginal reductions in CO₂ emissions. Overall, the findings highlight the central role of logistics modernization and green trade facilitation in reconciling trade-led growth with decarbonization in the Mediterranean Basin. From a policy perspective, the evidence suggests that prioritizing green logistics and trade facilitation—particularly in high-emission Mediterranean economies—can yield the largest marginal reductions in CO₂ emissions. Full article

(This article belongs to the Topic Digital Intelligence Leads Environmental Regulation: A New Paradigm for Green Sustainable Development)

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33 pages, 2248 KB

Open AccessReview

Human Capital and Economic Growth in Colombia: Review

by María Valentina Rondón-Castillo, Hugo Alexander Rondón-Quintana and Juan Gabriel Bastidas-Martínez

Economies 2026, 14(1), 23; https://doi.org/10.3390/economies14010023 - 14 Jan 2026

Viewed by 262

Abstract

Globally, human capital is recognized as a structural determinant of economic growth, with evidence of a positive, bidirectional, and significant relationship between both variables. However, in Colombia, few studies have directly measured the influence of human capital on national economic growth. To date, [...] Read more.

Globally, human capital is recognized as a structural determinant of economic growth, with evidence of a positive, bidirectional, and significant relationship between both variables. However, in Colombia, few studies have directly measured the influence of human capital on national economic growth. To date, there is no academic review that integrates and analyzes the available evidence on this link, even though such studies are fundamental for understanding the drivers of development, reducing structural inequalities, and guiding policies that promote productivity and social inclusion. This study conducted a literature review across major international and Colombian academic databases, with a specific focus on Colombia and a minimum 25-year observation window, to identify research gaps and establish conceptual foundations for future research. In total, 140 articles were reviewed. In general terms, the findings show that, although human capital is an essential driver of Colombia’s economic growth, its full impact is constrained by structural and regional inequalities, corruption, violence, labor informality, institutional fragmentation, and mismatches between education and labor market demands. These results underscore the need to expand empirical research to better measure its effects and to inform more inclusive and sustainable development policies. Full article

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16 pages, 352 KB

Open AccessArticle

The Investing–Saving Relationship Debate Between Opposing Views: A Panel Analysis Across Main Economic Regions

by Antonio Focacci

Economies 2026, 14(1), 22; https://doi.org/10.3390/economies14010022 - 13 Jan 2026

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Abstract

This paper focuses on an empirical analysis of the relationship between investing and saving, taking into account various economic regions. The economic aggregates are selected following the International Monetary Fund (IMF) standard classification. The investigation is developed within the theoretical frameworks proposed by [...] Read more.

This paper focuses on an empirical analysis of the relationship between investing and saving, taking into account various economic regions. The economic aggregates are selected following the International Monetary Fund (IMF) standard classification. The investigation is developed within the theoretical frameworks proposed by the debate between the mainstream neoclassical school of thought and the post-Keynesian school. Our approach differs from other empirical works on the subject in that we apply innovative Granger non-causality panel tests to four datasets covering a wide range of countries over the period 1980 to 2024. This is the very first time these advanced panel tests have been applied to such data. The information is valuable for defining macroeconomic policy and supporting potential credibility of one theory over another in the debate. Our empirical results are coherent with the post-Keynesian interpretation of the relationship between the variables when applied to an international context in which trade and capital movements are liberalized. Full article

(This article belongs to the Special Issue Advances in Applied Economics: Trade, Growth and Policy Modeling)

21 pages, 1242 KB

Open AccessArticle

Structural Conditions for Financial Literacy Diffusion in Morocco: An ARDL Approach

by Hamida Lahjouji and Mariam El Haddadi

Economies 2026, 14(1), 21; https://doi.org/10.3390/economies14010021 - 13 Jan 2026

Viewed by 226

Abstract

In a worldwide context marked by increasing attention to financial literacy as a factor of financial inclusion, Morocco take part of this dynamic, seeking to improve the financial skills of its population. This article does not measure financial literacy directly but aims to [...] Read more.

In a worldwide context marked by increasing attention to financial literacy as a factor of financial inclusion, Morocco take part of this dynamic, seeking to improve the financial skills of its population. This article does not measure financial literacy directly but aims to explore the structural conditions that enable its diffusion in Morocco, using macroeconomic indicators such as income, employability, and education, along with financial infrastructure. Adopting a mixed methodology, this study combines both qualitative and quantitative analysis of the national context, including an overview of public policies, socioeconomic characteristics, and financial literacy initiatives, with a quantitative analysis based on an Autoregressive Distributed Lag (ARDL) econometric model. Bank branch density is employed as an indirect proxy for financial infrastructure, reflecting access to formal financial services in the absence of time-series literacy data. The results show that gross national income (GNI) per capita, the labor forces, and elementary school enrolment rates influence banking density, though without producing statistically significant effects in the long term. In the short term, only GNI has a temporary but not very robust impact. These results highlight the limitations of macroeconomic indicators alone in explaining financial literacy diffusion and underscore the potential role of structural factors such as digital innovation, governance, or inclusion of youth and female indicators. Full article

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14 pages, 277 KB

Open AccessArticle

Precautionary Money Demand in the Economy’s Demand Curve and in the Fiscal and Monetary Multipliers: An Extension

by Carlos Pateiro-Rodríguez, Federico Martín-Bermúdez, Esther Barros-Campello, Carlos Pateiro-López and María Mercedes Teijeiro-Álvarez

Economies 2026, 14(1), 20; https://doi.org/10.3390/economies14010020 - 13 Jan 2026

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Abstract

This paper examines, through a modified aggregate demand curve, the reduction in equilibrium income caused by the presence of precautionary demand in the money demand function. Specifically, this paper rigorously analyses the transformation of the well-known fiscal and monetary policy multipliers, β and [...] Read more.

This paper examines, through a modified aggregate demand curve, the reduction in equilibrium income caused by the presence of precautionary demand in the money demand function. Specifically, this paper rigorously analyses the transformation of the well-known fiscal and monetary policy multipliers, β and γ, commonly found in macroeconomic theory textbooks. Ceteris paribus, an increase (decrease) in precautionary money demand reduces (increases) equilibrium income, as can be seen through the modified multipliers β and γ. Multiple contingencies that emerged suddenly between 2008 and 2023 may have altered agents’ perceptions regarding precautionary money demand. This work contributes to the adaptation of some well-established tools of macroeconomic theory to address events of this nature. Full article

(This article belongs to the Section Macroeconomics, Monetary Economics, and Financial Markets)

24 pages, 2019 KB

Open AccessArticle

A Tariff Model with Bilateral Deterrence

by Pasquale Lucio Scandizzo

Economies 2026, 14(1), 19; https://doi.org/10.3390/economies14010019 - 12 Jan 2026

Viewed by 211

Abstract

This paper develops a dynamic real-options model of tariff deterrence in which the exporting country, though subject to the importing country’s market power, assumes the role of leader in a Stackelberg framework under uncertainty by acting preventively to dissuade the importer from imposing [...] Read more.

This paper develops a dynamic real-options model of tariff deterrence in which the exporting country, though subject to the importing country’s market power, assumes the role of leader in a Stackelberg framework under uncertainty by acting preventively to dissuade the importer from imposing a tariff. The follower holds an option to impose a tariff subject to irreversible enforcement costs, while the leader can undertake costly deterrence, through signaling and capacity building, to delay or prevent action. The interaction generates a preventive equilibrium in which the importing country (the follower) optimally remains inactive, and the exporting country (the leader) sustains continuous deterrence expenditures, which nevertheless may be preferable to submit to tariffs. Uncertainty and irreversibility, which can both be manipulated, enlarge the inaction zone, and increase resilience and adaptability of both contenders. Both conditions tend to stabilize the system but transfer costs asymmetrically: the powerful waits costlessly, the weaker pays to maintain stability. In equilibrium, deterrence requires continuous spending by the leader to keep the follower indifferent between acting and waiting, implying that power operates through potentiality rather than action. The paper extends the Stackelberg framework to international trade, revealing that although the theoretical first-mover advantage rests with the larger, importing country, the smaller, exporting country becomes the de facto leader by acting preemptively to discourage the threat of tariff. Full article

(This article belongs to the Section International, Regional, and Transportation Economics)

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28 pages, 506 KB

Open AccessArticle

Economic Policy Uncertainty and Firm Profitability in Nigeria: Does Oil Price Volatility Deepen the Shock?

by Olajide O. Oyadeyi, Ehireme Uddin and Esther O. Olusola

Economies 2026, 14(1), 18; https://doi.org/10.3390/economies14010018 - 9 Jan 2026

Viewed by 447

Abstract

Recent studies have focused on the detrimental effects of global economic policy uncertainty (EPU) on firm profitability. Nevertheless, none of these studies has focused on a developing economy like Nigeria. To understand this, the study conducted a host of regression analyses using the [...] Read more.

Recent studies have focused on the detrimental effects of global economic policy uncertainty (EPU) on firm profitability. Nevertheless, none of these studies has focused on a developing economy like Nigeria. To understand this, the study conducted a host of regression analyses using the Driscoll and Kraay fixed-effect estimator and the two-step system generalised method of moments to examine the effects of global crude oil prices and domestic and global economic policy uncertainty on firm profitability in Nigeria from 2005 to 2024. The findings indicate that while global EPU had a minimal impact on firm profitability, domestic EPU had a substantial negative impact. The findings remain consistent even across the sub-samples, sensitivity, and robustness analyses. Furthermore, the findings showed that firm size and capital are significant determinants of profitability for Nigerian firms. At the same time, oil prices and their interactions do not affect firm profitability in Nigeria. The study suggests that regulators in the Nigerian business environment can contribute to building a more resilient environment by implementing systems to monitor critical economic indicators and ensure timely responses to emerging challenges. Systematic evaluations of economic uncertainties, including business sentiment, inflation rates, exchange rates, interest rates, and economic growth, can provide valuable insights for policy formulation and interventions aimed at enhancing the profitability of Nigerian firms. Full article

(This article belongs to the Special Issue Emerging Market Economies: Globalization, Monetary Policy, and Asset Prices)

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19 pages, 433 KB

Open AccessArticle

Revealing Japan’s CPI Fluctuation Mechanisms via a Time-Varying Loading Factor Model

by Hideo Noda, Koki Kyo and Fengqi Fang

Economies 2026, 14(1), 17; https://doi.org/10.3390/economies14010017 - 9 Jan 2026

Viewed by 201

Abstract

In this article, we examine the dynamic interdependencies among components of Japan’s consumer price index (CPI) using a two-lag time-varying loading factor (TLTVLF) model. Whereas previous studies have typically decomposed CPI series into long-term trends, seasonal patterns, and cyclical fluctuations, such approaches mainly [...] Read more.

In this article, we examine the dynamic interdependencies among components of Japan’s consumer price index (CPI) using a two-lag time-varying loading factor (TLTVLF) model. Whereas previous studies have typically decomposed CPI series into long-term trends, seasonal patterns, and cyclical fluctuations, such approaches mainly describe structural features without fully uncovering the latent mechanisms that drive price dynamics. The proposed TLTVFL modeling framework addresses this limitation by allowing both factor loadings and their lagged effects to evolve over time, thereby capturing gradual structural changes and the time-varying propagation of shocks across CPI categories. Using monthly data for ten major CPI categories from January 1970 to December 2024, we identify evolving common factors, category-specific sensitivities, and dynamic transmission patterns associated with major macroeconomic events. The findings reveal substantial temporal variation in inter-category linkages, offering fresh insights into sectoral contributions to inflationary pressures and providing policy-relevant implications for more effective monetary and fiscal interventions. Methodologically, this study extends the frontier of dynamic factor modeling, while empirically, it deepens the understanding of the mechanisms underlying price fluctuations over a long historical horizon. Full article

(This article belongs to the Section Economic Development)

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38 pages, 8350 KB

Open AccessArticle

Trajectories, Fairness, and Convergence: Global Development in a Multidimensional Econo-Environmental Capability Space

by Muhammad Hasan Imaduddin, Soumya Basu and Hideyuki Okumura

Economies 2026, 14(1), 16; https://doi.org/10.3390/economies14010016 - 8 Jan 2026

Viewed by 332

Abstract

This study examines global econo-environmental capability for 118 countries over 1995 to 2024 using a five-lens framework covering productive capacity (PC), developmental momentum (DM), resource efficiency (RE), degradation and depletion ratio (DDR), and remaining development potential (RDP). Using pooled k-means, a stable four [...] Read more.

This study examines global econo-environmental capability for 118 countries over 1995 to 2024 using a five-lens framework covering productive capacity (PC), developmental momentum (DM), resource efficiency (RE), degradation and depletion ratio (DDR), and remaining development potential (RDP). Using pooled k-means, a stable four archetype typology is identified and shown to persist over time. The analysis assesses how archetypes characterize country–year outcomes (RQ1), whether cross-sectional fairness is changing and relates to frontier slowdown (RQ2), and how archetypes, distance, and regional context shape transition probabilities and club convergence (RQ3). Inequality in five-dimensional capability declines slightly over the period (Gini from 0.109 to 0.092 and Palma from 1.563 to 1.464), implying modest convergence rather than increasing polarization. Average capability also improves, with larger gains for initially distant countries and smaller gains near the frontier, which is consistent with mild club convergence. Regionally, high capability cases are concentrated in Western Europe and North America, while sustained upgrading is observed in parts of Eastern Europe, mixed stability is observed in East and Central Asia, and selective advances are observed in ASEAN. Policy implications should be based on a country’s archetype and its distance to the capability ideal. Lagging countries should prioritize diffusion of proven high efficiency options and basic capability building, while frontier countries should priorities innovation, structural change, and deeper decarbonization. Policy emphasis should be updated as countries move within the capability space over time. Full article

(This article belongs to the Section Economic Development)

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15 pages, 525 KB

Open AccessArticle

From Proximity to Correlation: How Different Measures of Distance Shape U.S. Emerging Market Stock Market Co-Movements

by Lumengo Bonga-Bonga and Lavie Ncube

Economies 2026, 14(1), 15; https://doi.org/10.3390/economies14010015 - 8 Jan 2026

Viewed by 228

Abstract

This paper extends the gravity model to financial markets by examining how distance and bilateral linkages influence stock market correlations between the United States and selected emerging economies. To this end, the Poisson Pseudo Maximum Likelihood (PPML) estimator is used to account for [...] Read more.

This paper extends the gravity model to financial markets by examining how distance and bilateral linkages influence stock market correlations between the United States and selected emerging economies. To this end, the Poisson Pseudo Maximum Likelihood (PPML) estimator is used to account for heteroskedasticity and zero-value observations. Results show that greater economic distance weakens equity market correlations, while larger combined economic mass strengthens them, suggesting that bigger economies foster deeper financial linkages. Moreover, the results show that higher trade intensity between the U.S. and emerging markets results in negative correlations, which are explained by portfolio diversification motives—investors view these markets as substitutes, reallocating funds in opposite directions under varying conditions. The findings highlight how structural factors, distance measures, and trade intensity influence international equity market correlations, providing key insights for portfolio allocation and diversification strategies. Full article

(This article belongs to the Special Issue Advances in Financial Market Phenomenology)

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22 pages, 511 KB

Open AccessArticle

Renewable Dependence as an Institutional Transition Risk in Hydrocarbon Economies: Insights from Azerbaijan

by Matteo Landoni and Nijat Muradzada

Economies 2026, 14(1), 14; https://doi.org/10.3390/economies14010014 - 5 Jan 2026

Viewed by 442

Abstract

Transition to renewable energy leads to assumed economic diversification; however, the institutional risks for hydrocarbon-dependent economies remain high. This paper identifies the conditions under which transitioning economies enter a novel dependency during the renewable transition. Our analysis combines the Multi-Level Perspective with Historical [...] Read more.

Transition to renewable energy leads to assumed economic diversification; however, the institutional risks for hydrocarbon-dependent economies remain high. This paper identifies the conditions under which transitioning economies enter a novel dependency during the renewable transition. Our analysis combines the Multi-Level Perspective with Historical Institutionalism to explore Azerbaijan’s 30-year trajectory across the oil, gas, and emerging renewable phases, serving as an illustrative case. Evidence from the literature and expert interviews illustrates that renewable investments are channelled through hydrocarbon-era institutional practices, enclave-style contracting, centralised decision-making, and reliance on foreign technology providers. These conditions constrain domestic niche formation and limit opportunities for local capability development. As a result, renewables become embedded within the existing institutional architecture rather than displacing it, serving primarily to substitute hydrocarbons as an export commodity rather than to catalyse diversification. The paper conceptualises this trajectory as a possible renewable dependence: a pathway in which renewable energy is integrated into an export-oriented, state-dominated political economy without altering its core institutional logic. The identified configurations are common across hydrocarbon economies in Central Asia and MENA, offering transferable insights into when and why renewable transitions risk reproducing, rather than transforming, established development models. Full article

(This article belongs to the Section Economic Development)

20 pages, 1319 KB

Open AccessArticle

Comparative Analysis of Labor Markets in Bulgaria, Italy, and the UK: Wage Dynamics, Labor Costs, and Digital Development

by Dmytro Zherlitsyn and Nataliia Rekova

Economies 2026, 14(1), 13; https://doi.org/10.3390/economies14010013 - 5 Jan 2026

Viewed by 401

Abstract

This article examines labor market dynamics in Bulgaria, Italy, and the United Kingdom by integrating demographic pressures, wage and labor cost adjustment, redistribution mechanisms, inequality outcomes, and digital readiness into a single comparative framework. This study first applies hierarchical clustering to a harmonized [...] Read more.

This article examines labor market dynamics in Bulgaria, Italy, and the United Kingdom by integrating demographic pressures, wage and labor cost adjustment, redistribution mechanisms, inequality outcomes, and digital readiness into a single comparative framework. This study first applies hierarchical clustering to a harmonized EU country panel for 2017–2024, using GDP per capita in PPS, average annual wage, and unemployment rate to position the three countries within the European convergence space and income–labor cost groupings. The results show that Bulgaria belongs to a low-income, fast-converging group, with nominal wages and hourly labor costs more than doubling, strong real-wage growth from a low base, and an improving price level index. At the same time, unemployment fell to below the EU average, yet income inequality remains persistently high. Italy represents a high-income but slow-growing labor market, in which real wages have declined, and labor costs per hour remain above the EU mean with a significant non-wage component. Unemployment remains relatively elevated, indicating divergence in workers’ purchasing power despite high income levels. The UK has labor costs in the mature high-income range, low unemployment, and the lowest tax wedge for low-wage workers, but with relatively high and volatile inequality. This study shows that wage dynamics, labor cost composition, and tax–benefit structures jointly mediate the translation of macroeconomic performance into household outcomes, generating distinct policy trade-offs across the three labor market configurations. Digital indicators further suggest that income level is not a sufficient predictor of digital engagement and that the observed aggregate labor market trends do not indicate a sharp employment contraction contemporaneous with the diffusion of technical innovations, such as generative AI. Full article

(This article belongs to the Special Issue Labour Market Dynamics in European Countries)

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25 pages, 421 KB

Open AccessArticle

Policy Instruments Against Climate Change: A Panel Data Analysis of Carbon Taxation and Emissions Trading in OECD Countries

by Nergis Feride Kaplan Donmez

Economies 2026, 14(1), 12; https://doi.org/10.3390/economies14010012 - 3 Jan 2026

Viewed by 739

Abstract

Since the Industrial Revolution, the increase in greenhouse gas emissions has led to a significant rise in global temperatures compared to the pre-industrial period. This development has heightened the importance of carbon pricing policies in combating climate change. This study aims to examine [...] Read more.

Since the Industrial Revolution, the increase in greenhouse gas emissions has led to a significant rise in global temperatures compared to the pre-industrial period. This development has heightened the importance of carbon pricing policies in combating climate change. This study aims to examine the effects of carbon pricing instruments, carbon taxes and emissions trading systems (ETS) on carbon dioxide (CO₂) emissions in OECD countries. A panel data analysis covering the period 2002–2023 was conducted, taking into account structural differences across countries as well as shared economic dynamics. The findings indicate that both carbon taxes and ETS mechanisms are effective in reducing CO₂ emissions in the long run. Moreover, while increased industrial activity contributes to higher emissions, a greater share of renewable and nuclear sources in the energy mix is found to support emission reduction. The study demonstrates that carbon pricing policies exert limited short-term effects but generate structural and lasting impacts in the long term. The findings are consistent with the existing literature and theoretical framework. Achieving permanent reductions in emissions requires a comprehensive policy approach that not only implements carbon pricing, but also strengthens energy efficiency and fuel substitution in the industrial sector while continuously increasing the share of clean sources in the energy supply. The analysis shows that carbon taxes and emissions trading systems (ETS) are effective in reducing emissions over the long run in OECD countries, and that their success varies depending on countries’ energy profiles and policy designs. These results underline that a well-designed and complementary carbon pricing framework is critical for achieving a sustainable transition. Full article

(This article belongs to the Special Issue The Impact of Green Fiscal Policies on Green Investment, Innovation and Green Productivity)

25 pages, 333 KB

Open AccessArticle

Artificial Intelligence, ESG Governance, and Green Innovation Efficiency in Emerging Economies

by Marwan Mansour, Mo’taz Al Zobi and Mohammed Alomair

Economies 2026, 14(1), 11; https://doi.org/10.3390/economies14010011 - 31 Dec 2025

Viewed by 565

Abstract

Emerging economies confront the dual challenge of accelerating digital transformation while simultaneously mitigating environmental degradation under conditions of institutional and governance heterogeneity. In this context, this study examines how artificial intelligence (AI) capability influences green innovation efficiency (GIE) in emerging Asian economies and [...] Read more.

Emerging economies confront the dual challenge of accelerating digital transformation while simultaneously mitigating environmental degradation under conditions of institutional and governance heterogeneity. In this context, this study examines how artificial intelligence (AI) capability influences green innovation efficiency (GIE) in emerging Asian economies and investigates whether environmental, social, and governance (ESG) performance conditions this relationship. Using an unbalanced panel of 59,112 firm-year observations from 4926 publicly listed firms across 15 emerging Asian economies over the period 2011–2022, we employ a comprehensive panel-data econometric framework that accounts for unobserved heterogeneity, dynamic effects, endogeneity, and potential self-selection bias. The empirical results indicate that AI capability is positively and significantly associated with higher green innovation efficiency. More importantly, ESG performance strengthens this relationship, suggesting that robust governance frameworks enhance firms’ ability to translate digital intelligence into environmentally efficient innovation outcomes. These findings underscore that AI adoption alone is insufficient to generate sustainable value; rather, its environmental effectiveness depends critically on complementary governance structures that promote transparency, accountability, and responsible risk management. The results remain robust after correcting for endogeneity concerns, alternative model specifications, and extensive sensitivity and heterogeneity analyses. Overall, this study contributes to the literature on digital transformation and sustainability by providing large-scale, multi-country evidence that highlights the pivotal role of ESG in shaping the sustainability returns to AI adoption in emerging economies. Full article

27 pages, 487 KB

Open AccessArticle

Sustainable Financing and Eco-Innovation as Drivers of Low-Carbon Transition: Empirical Evidence from Tunisia

by Faten Chibani and Jamel Eddine Henchiri

Economies 2026, 14(1), 10; https://doi.org/10.3390/economies14010010 - 30 Dec 2025

Viewed by 343

Abstract

Many emerging economies seek to lower carbon intensity while remaining heavily dependent on fossil fuels. This paper examines how sustainable finance, eco-innovation, and the energy mix shape Tunisia’s low-carbon transition. We use quarterly data for 2000–2023 and an econometric environmental-impact model that links [...] Read more.

Many emerging economies seek to lower carbon intensity while remaining heavily dependent on fossil fuels. This paper examines how sustainable finance, eco-innovation, and the energy mix shape Tunisia’s low-carbon transition. We use quarterly data for 2000–2023 and an econometric environmental-impact model that links carbon intensity to green finance, innovation, renewable and fossil energy, openness, income, and demographic factors. The results show that sustainable finance consistently reduces carbon intensity across all emission states, with stronger effects when emissions are high. The energy mix is crucial: a larger share of renewable energy lowers carbon intensity, while higher fossil energy use increases it and reinforces fossil carbon lock-in. Eco-innovation has its strongest mitigation effects in high-intensity situations, suggesting delayed effects linked to limited absorptive capacity and technology diffusion. Openness and demographic pressure tend to raise emissions through scale and consumption channels. Overall, the findings depict a finance-anchored but energy-constrained transition. They indicate that Tunisia and similar MENA economies can accelerate decarbonization by scaling credible sustainable finance instruments, speeding up renewable deployment, and strengthening the innovation and governance framework that supports green investment, innovation policy, and energy sector reform in semi-industrialized economies. Full article

(This article belongs to the Section Macroeconomics, Monetary Economics, and Financial Markets)

16 pages, 1025 KB

Open AccessArticle

Dynamic Price Transmission from SHFE to Thai Rubber Markets: A Cointegration–ECM and Machine-Learning Analysis

by Montchai Pinitjitsamut

Economies 2026, 14(1), 9; https://doi.org/10.3390/economies14010009 - 29 Dec 2025

Viewed by 270

Abstract

This study examines the dynamic transmission of international rubber prices along the SHFE–FOB Bangkok–local farm-gate chain in Thailand using weekly data and an integrated econometric–machine-learning framework. Engle–Granger cointegration tests reveal a stable long-run equilibrium in which domestic prices are tightly anchored to FOB [...] Read more.

This study examines the dynamic transmission of international rubber prices along the SHFE–FOB Bangkok–local farm-gate chain in Thailand using weekly data and an integrated econometric–machine-learning framework. Engle–Granger cointegration tests reveal a stable long-run equilibrium in which domestic prices are tightly anchored to FOB export quotations and the exchange rate, while SHFE futures function primarily as an upstream information benchmark and exert no direct long-run influence once the export-pricing channel is accounted for. A two-step error-correction model shows that approximately 13% of deviations from long-run parity are corrected each week, indicating gradual yet systematic convergence toward export-parity pricing. Short-run dynamics are dominated by contemporaneous changes in FOB prices, with only modest spillovers from SHFE and no statistically meaningful contribution from exchange-rate fluctuations at the weekly frequency. The asymmetric ECM indicates a pronounced upward-biased response: positive FOB shocks transmit strongly to domestic prices (θ⁺ ≈ 1.074), whereas negative shocks have only a limited impact (θ⁻ ≈ 0.067). This pattern is consistent with asymmetric adjustment along the supply chain, where export-price increases are passed through more rapidly than decreases. An ECM-constrained gradient boosting model is employed to assess potential nonlinearities but does not outperform the linear ECM, suggesting that once long-run equilibrium conditions are imposed, short-run price adjustment remains predominantly linear. Taken together, these findings underscore the central role of export pricing in Thailand’s rubber market and point to the importance of policy instruments that enhance price transparency, strengthen export-linked risk management, and improve resilience to international price shocks. Full article

(This article belongs to the Section Economic Development)

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18 pages, 546 KB

Open AccessArticle

Digital Pathways to Stability: A Cross-Country Analysis of the Fintech–Inclusion–Stability Nexus Across Selected Countries

by Hichem Saidi

Economies 2026, 14(1), 8; https://doi.org/10.3390/economies14010008 - 25 Dec 2025

Viewed by 554

Abstract

This paper examines the impact of fintech adoption and financial inclusion on financial stability in selected countries. Using panel data from 30 countries spanning 2011–2024, the study employs an empirical strategy based on Two-Way Fixed Effects, a dynamic two-step System GMM estimator, and [...] Read more.

This paper examines the impact of fintech adoption and financial inclusion on financial stability in selected countries. Using panel data from 30 countries spanning 2011–2024, the study employs an empirical strategy based on Two-Way Fixed Effects, a dynamic two-step System GMM estimator, and Panel Quantile Regression. This multi-method approach captures both average and distributional effects while addressing key econometric challenges, including endogeneity, heteroskedasticity, serial correlation, and cross-sectional dependence. The empirical findings differ across estimation techniques but reveal two consistent patterns: financial inclusion exerts a positive and significant effect on financial stability across all models, whereas the impact of fintech is model-dependent. While fintech appears insignificant under the Two-Way Fixed Effects and Driscoll–Kraay specifications, the System GMM and quantile regression analyses confirm that both fintech and financial inclusion significantly enhance financial stability. Overall, the results show that fintech can boost financial stability, but only when supported by broad financial inclusion and solid institutions. The findings highlight that policymakers must pair the growth of digital finance with clear regulatory standards and programs designed to deepen financial inclusion. Full article

(This article belongs to the Section Macroeconomics, Monetary Economics, and Financial Markets)

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19 pages, 796 KB

Open AccessArticle

The Power of Peers: How Peer Effects Drive R&D Investment in Chinese Firms

by He Tong, Saizal Pinjaman and Debbra Toria Nipo

Economies 2026, 14(1), 7; https://doi.org/10.3390/economies14010007 - 25 Dec 2025

Viewed by 380

Abstract

Innovation drives China’s high-quality economic development, with corporate R&D investment being key to innovation. Using data from Chinese A-share non-financial listed firms (2010–2022), this study defines peer firms using a four-dimensional dynamic matching method of “year-industry-ownership nature-size quantile” and empirically explores peer effects [...] Read more.

Innovation drives China’s high-quality economic development, with corporate R&D investment being key to innovation. Using data from Chinese A-share non-financial listed firms (2010–2022), this study defines peer firms using a four-dimensional dynamic matching method of “year-industry-ownership nature-size quantile” and empirically explores peer effects on corporate R&D, combining dynamic panel analysis, instrumental variable regression, and robustness tests. The findings reveal a significant positive peer effect in the R&D investment of Chinese firms, meaning the R&D investment level of peer firms exerts a positive influence on the R&D decisions of focal firms. This conclusion is supported by Social Learning Theory, Knowledge Spillover Theory, and Institutional Theory: focal firms reduce decision-making uncertainty by observing and imitating peers, lower the marginal cost of R&D through knowledge spillovers from peers, and align their R&D behaviors with peers to gain legitimacy. This effect remains robust after addressing endogeneity. The study expands peer effect theory’s application in emerging markets and innovates peer identification, offering references for firms’ R&D strategies and governments’ innovation policies. Full article

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34 pages, 2633 KB

Open AccessArticle

Additional Contributions of Thermodynamics to Economics

by Vítor Costa

Economies 2026, 14(1), 6; https://doi.org/10.3390/economies14010006 - 25 Dec 2025

Viewed by 349

Abstract

The contributions of Thermodynamics to Economics have been masterfully pioneered by P. A. Samuelson in his Foundations of Economic Analysis, adapting the Le Châtelier Principle to relate changes in economic variables. Recent contributions have been given, including the economic counterparts of energy, [...] Read more.

The contributions of Thermodynamics to Economics have been masterfully pioneered by P. A. Samuelson in his Foundations of Economic Analysis, adapting the Le Châtelier Principle to relate changes in economic variables. Recent contributions have been given, including the economic counterparts of energy, temperature, reversibility, and irreversibility, the Carnot engine, entropy, entropy generation, and the four Laws of Thermodynamics. Starting from them, toward a more efficient (more perfect) economy, the present work aims at (i) showing the contribution of negotiation to a more perfect economy; (ii) proposing endoreversible economic processes, and evaluating their efficiency at maximum merchandise wealth delivery; (iii) proposing the dynamic economic processes’ analysis based on the Economics analogue of specific heat, closely related to the demand elasticity coefficient; (iv) exploring ways to maximize merchandise wealth delivery instead of maximizing merchandise economic entropy generation (financial value generation) in dynamic processes; and (v) defining and evaluating the Economics analogue of exergy, the maximum potential of economic systems to deliver merchandise wealth. Full article

(This article belongs to the Section Growth, and Natural Resources (Environment + Agriculture))

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29 pages, 860 KB

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The Impact of Digital Technology on E-Commerce and Sustainable Performance in the EU

by Maria Magdalena Criveanu

Economies 2026, 14(1), 5; https://doi.org/10.3390/economies14010005 - 25 Dec 2025

Viewed by 1138

Abstract

The expansion of digital technologies has led to a digital transformation of the economy and society. E-commerce, driven by new digital technologies and the restrictions during the COVID-19 pandemic, has increased its share in the overall trade of goods and services, influencing economic [...] Read more.

The expansion of digital technologies has led to a digital transformation of the economy and society. E-commerce, driven by new digital technologies and the restrictions during the COVID-19 pandemic, has increased its share in the overall trade of goods and services, influencing economic growth. This article examines the impact of emerging digital technologies such as artificial intelligence (AI), big data, the Internet of Things (IoT), and cloud computing (CC) on the e-commerce sector. Within this study, we explore the digital transformation of the EU economy, focusing on the impact of artificial intelligence (AI), big data, the Internet of Things (IoT), and cloud computing (CC) on e-commerce development and sustainable economic performance (GDP). The methodology employs a multilayer perceptron (MLP) neural network to model the non-linear, predictive relationship between digital adoption and e-commerce. Subsequently, hierarchical cluster analysis groups countries by digital maturity. The findings confirm that digital adoption is a significant and non-linear predictor of e-commerce, while the clustering reveals a pronounced regional heterogeneity in the capacity to translate technology into macro-economic performance. The research results show that by understanding and adopting these technologies, companies in the e-commerce field can gain a competitive advantage and better meet customer requirements and expectations. This adoption can lead to improved personalization of the shopping experience, increased operational efficiency, and enhanced customer satisfaction, ultimately resulting in better and sustainable economic performance. Full article

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Economies, Volume 14, Issue 1 (January 2026) – 34 articles

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