The role of entrepreneurship and innovation in the environmental and economic dimensions of growth

Abstract

This study is mainly performed to examine the effects of renewable energy, entrepreneurial activity, and innovation on GDP and CO2 emissions in 13 European countries from 2002 to 2017. The estimation of the feasible generalized least square (FGLS) method shows that the share of renewable energy consumption in accordance with the total energy consumption, entrepreneurial activity, and innovation, defined by the number of patents, increases the economic growth but inversely decreases CO2 emission. The share of research & development expenditure to GDP lowers the CO2 emission without having any impact on the economy. With reference to these results, a set of implications are deduced, specifically for policymakers. The substitution of renewable energy and the encouragement of innovative entrepreneurs to undertake green businesses are essential to attain the objectives of sustainable development.