Entrepreneurship and Ecological Sustainability in EU-5: A Panel Quantile Approach

Abstract

The 2035 and 2050 climate targets have accelerated the European Union's (EU) commitment to decarbonization policies. While public sector initiatives remain crucial, the private sector, particularly entrepreneurial activities, plays an equally important role in shaping environmental well-being. Given their growing significance within the EU economies, these activities must be considered fundamental components in designing effective environmental policies. In this context, the present study employs a method of moments quantile approach to examine the impact of entrepreneurship on environmental sustainability across five EU countries (France, Germany, Italy, Spain, and the Netherlands) from 2001 to 2022, framed within the load capacity curve hypothesis. Additionally, the study evaluates the combined effects of green energy consumption and urbanization, recognizing their interconnected influence on ecological sustainability. Empirical results indicate that the load capacity curve hypothesis does not hold for these nations. Moreover, green energy consumption and urbanization significantly enhance environmental sustainability, while entrepreneurship is linked to a decline in environmental quality. Given the environmental challenges associated with entrepreneurship in the EU, it is imperative to develop and enforce policies that promote environmentally sustainable business practices. One possible measure could be the mandatory adoption of environmentally friendly certifications, such as ISO standards, for new enterprises. This study concludes with a discussion of policy implications aimed at fostering a sustainable environment through green entrepreneurship and supportive regulatory frameworks.