Structural transformation: Testing convergence in energy, carbon emissions, innovation, and governance
Structural transformation: Testing convergence in energy, carbon emissions, innovation, and governance

Summary/Abstract: The green transition has increasingly been conceptualised as a process of structural transformation encompassing energy systems, innovation capacity, carbon performance, and institutional governance. However, whether this transformation leads to convergence across countries or reinforces persistent structural divergence remains an open empirical question. This study examines convergence dynamics within the European green transition by analysing a balanced panel of 27 European Union member states and Ukraine over the period 2004-2023. The analysis applies complementary σ-convergence indicators and β-convergence regressions, including pooled, fixed-effects, and time-effects specifications, to distinguish between cross-country structural disparities and within-country adjustment dynamics. The results reveal asymmetric convergence patterns across transition dimensions. Renewable energy penetration and research and development intensity exhibit statistically significant convergence, reflecting coordinated policy frameworks and technological diffusion. In contrast, carbon emissions remain highly heterogeneous at the cross-country level, while institutional governance quality displays divergence in pooled specifications and only conditional convergence once country-specific effects are controlled for. Time-effects estimations further indicate that major systemic shocks, such as the global financial crisis and the COVID-19 pandemic, have significantly shaped convergence trajectories. The findings demonstrate that the green transition in EU unfolds as an institutionally mediated structural transformation, in which technological and innovation dimensions converge more rapidly than emissions and governance. This underscores the need for differentiated policy instruments and strengthened governance architectures to support balanced and resilient green transition pathways.

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