Journal of Business Economics and Management | 2026
Authors: Oprea S.-V.; Bâra A.
DOI: 10.3846/jbem.2026.26926
Journal: Journal of Business Economics and Management
Year: 2026
Publisher: Vilnius Gediminas Technical University
Document Type: Article
Open Access: All Open Access; Gold Open Access; Green Open Access
Cited by: 0
Our research investigates the dynamic relationship between economic growth and environmental sustainability in Serbia, a country situated at the intersection of Western environmental standards and Eastern development models. Specifically, it examines whether economic growth, as measured by GDP per capita, conflicts with environmental sustainability. It also considers the roles of renewable energy consumption (RENC), urbanization (URB) and trade openness (TO) as mediating variables. The analysis is based on annual time series data for Serbia from 1995 onward. A Vector Error Correction Model (VECM) framework is employed to assess both short-run and long-run relationships among the variables. Our research addresses the underexplored question of how countries like Serbia can reconcile growth with sustainability in a policy space shaped by contrasting regional norms. The results indicate a short-run trade-off between GDP and environmental sustainability, as lagged CO₂ emissions and RENC negatively affect GDP growth. However, in the long run, growth is positively associated with TO and URB, while RENC is strongly driven by URB. CO₂ emissions appear to evolve relatively independently of TO and URB. The adjustment coefficients confirm that GDP, CO₂ and RENC significantly respond to deviations from long-run equilibrium, with URB playing a central role in stabilizing the system. © 2026 The Author(s).
CO₂ emissions; Error Correction Term (ECT); GDP; renewables integration; trade openness; VECM