Governance, Clean Energy, and FDI: Pathways to Sustainability in CEE
Governance, Clean Energy, and FDI: Pathways to Sustainability in CEE

Summary/Abstract: In light of the European Green Deal, contemporary Environmental Kuznets Curve (EKC) literature emphasizes non-income mechanisms for mitigating environmental degradation. In particular, the decarbonization potential of renewable energy relies heavily on institutional frameworks that facilitate or impede green initiatives. This study examines the Renewable Kuznets Curve across 10 Central and Eastern European (CEE) economies from 2006 to 2025. Alongside standard economic controls- economic freedom, foreign direct investment, private sector domestic credit, and labor productivity- the empirical framework incorporates institutional metrics from the Worldwide Governance Indicators alongside language-specific Google Trends data on corruption-related search volume. Employing Panel Dynamic OLS (PDOLS) and Pooled Mean Group (PMG-ARDL) estimation techniques, the findings reveal that government effectiveness curbs emissions across both short- and long-term horizons, whereas rule of law and corruption control yield substantial long-term ecological benefits. Furthermore, search-based corruption queries serve as a viable real-time proxy for institutional performance, offering practical value for environmental nowcasting.

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