Impact of innovation and economic structure on CO₂ emissions in Poland and Spain: Evidence from Bayesian Fourier autoregressive distributed lag modelling
Impact of innovation and economic structure on CO₂ emissions in Poland and Spain: Evidence from Bayesian Fourier autoregressive distributed lag modelling

Summary/Abstract: Objective: The article aims to determine the impact of innovation, the level of economic activity (measured as GDP per capita), and the added value of key economic sectors (agriculture, industry, and services) on CO₂ emissions in Poland and Spain, and to assess whether innovations could significantly reduce emissions considering economic structural differences and dynamics. Research Design & Methods: The study employed a quantitative research design. It used Fourier autoregressive distributed lag (FARDL) and Bayesian Fourier autoregressive distributed lag (Bayesian FARDL) econometric models to analyse data from 1995 to 2022. The sample encompassed macroeconomic data for Poland and Spain. Findings: The study revealed significant differences between Poland and Spain. In Poland, despite a higher number of patent applications, technological innovations did not significantly affect CO₂ emissions, indicating limited application in high-emission sectors. Conversely, in Spain, innovations positively impacted CO₂ emissions, particularly in energy-intensive sectors. Energy consumption strongly influenced emissions in both countries, with Spain showing a more pronounced long-term effect. GDP negatively affected CO₂ emissions in Poland over the long run, whereas the study did not identify such relationship for Spain. The industrial and service sectors significantly impacted emissions and innovation in Poland, while in Spain, the industrial sector and patent activity were crucial determinants. Implications & Recommendations: The findings highlight the need for tailored economic and energy policy adjustments in both countries, especially focused on innovation, to enhance the effectiveness of their green transitions. Contribution & Value Added: This article contributes by providing a comparative analysis of Poland and Spain using advanced econometric methods, identifying country-specific dynamics between innovation, sectoral structure, the level of economic activity, and CO₂ emissions, thus providing novel insights for policymaking in the context of sustainability. Moreover, the study applied a relatively new and advanced Bayesian Fourier ARDL modelling, enhancing the analysis' methodological rigour.

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