Economic Growth in the Digital Era: Innovation, Cultural Dimensions, and Environmental Policy Challenges

Ofelia Ema Aleca; Florin Mihai

doi:10.5755/j01.ee.37.3.40550

Authors

Ofelia Ema Aleca Bucharest University of Economic Studies, Romania
Florin Mihai Bucharest University of Economic Studies, Romania

DOI:

https://doi.org/10.5755/j01.ee.37.3.40550

Keywords:

Digital Economy, Economic Growth, Hofstede, Innovation

Abstract

This research provides an analysis of the effects of innovation, digitalization, and environmental taxation on economic growth, as well as the moderating effect of national cultural traits within the context of the European Union's member states. It addresses a need that arises as the significance of technological transformation has increased within the context of multiple nations with diverse cultures. The study analyzed a balanced panel dataset covering a time period of 2013 to 2022 for 27 EU member states, with a total of 270 observations. We employed a mixture of econometric analyses, including ordinary least squares (OLS) estimates, fixed-effects panel regressions, and a form of lagged variable modeling. Environmental tax revenues are found to have a negative effect on GDP per capita in the short run. Scientific output from research and digitalization engagement levels (with a measurement variable based on online purchasing) both show positive impacts on the rate of economic growth. To account for the potential effects of culture on the outcomes, countries are grouped into 3 clusters based upon Hofstede’s cultural dimensions. Results show that cultural differences play an important role in determining the effect of innovation, environmental policy, and environmental taxation on economic outcomes. In short, EU member state countries with improved rates of growth were observed in the context of low levels of uncertainty avoidance and high levels of individualism. The findings of this study, as discussed in the empirical section of this paper, provide several contributions to research and future policy considerations. For theoretical contributions, the study expanded upon macroeconomic models of empirical strategies by adding cultural elements, following the work of Hofstede. As for future policies, the results suggest that customizing innovation and environmental policy to the context of the national culture may leverage better performance of these outcomes.

Author Biographies

Ofelia Ema Aleca, Bucharest University of Economic Studies, Romania

Ofelia-Ema Aleca obtained her Ph.D. in Accounting in 2009. Since 2016, she has been an Associate Professor in the Department of Management Information Systems at the Bucharest University of Economic Studies. With an academic career spanning more than two decades, she recently became a doctoral coordinator. Her scholarly work includes over 20 articles and studies published in indexed journals and presented at national and international conferences. Her areas of interest include management information systems, digital technologies, digital businesses, and their sustainability.
Florin Mihai, Bucharest University of Economic Studies, Romania

Florin Mihai has been the head of the Department of Management Information Systems since 2013. He served as the deputy dean of the Faculty of Accounting and Management Information Systems from 2008 to 2012. Between 2008 and 2013, he coordinated the IT development team for university management at the Bucharest University of Economic Studies. He is currently part of the maintenance team. He has contributed to the development of several IT platforms in education, finance, and accounting. His research focuses on educational computer platforms, ERP systems, and sustainability in digitization. Since 2022, he has been a member of the ARACIS Council – the Romanian Agency for Quality Assurance in Higher Education. From 2010 to 2021, he was a member of the ARACIS Commission of Permanent Experts for distance and part-time education.