Dr. Emine Meltem Bastan (p)

This study investigates the influence of China’s Belt and Road Initiative (BRI) on the European innovation ecosystem, specifically examining how this large-scale geopolitical strategy affects firm-level innovation decisions and performance. By utilizing firm-level data from the Community Innovation Survey (CIS) across 12 European countries for the 2012–2018 period, the research explores whether the BRI’s impact possesses a significant spatial dimension and how these effects vary according to a firm’s market orientation.
The methodological framework centers on an original application of the Mairesse-Mohnen-Kremp (MMK) model, which structures the relationship between innovation inputs (R&D), innovation outputs (innovative sales), and firm productivity. A primary contribution of the study is the pioneering integration of spatial dependence into every block of the MMK framework. By constructing spatial weight matrices based on both geographical proximity and economic linkages, the analysis identifies how innovation behavior is transmitted through regional and networked interdependencies. The study further develops a novel dataset by merging CIS microdata with World Bank data on BRI-related trade cost declines, employing an instrumental variable approach to isolate the impact of these exogenous shocks.
The empirical results demonstrate that the BRI significantly disrupts the European innovation landscape. In the first block of the MMK model, the BRI is associated with a general decline in R&D engagement. While domestic-oriented firms may increase R&D intensity—suggesting a survival-driven selection mechanism—firms oriented toward EU-EFTA or global markets exhibit marked declines. The inclusion of spatial terms reveals that proximity to internationally oriented peers, once a source of positive knowledge spillovers, becomes a liability under the BRI-induced realignment. In several instances, the introduction of the BRI reverses the sign of spatial coefficients, indicating a breakdown in the strategic cohesion and innovation synergies previously fostered by EU policy frameworks.
These findings suggest that traditional drivers of innovation, such as regional clustering and economic integration, may be undermined by external geopolitical shifts. The study concludes that EU innovation policies, such as the Smart Specialisation Strategy (S3), must be updated to include a global strategic dimension that accounts for external competitive threats. Ultimately, the study highlights the necessity for an adaptive, outward-looking policy framework that combines regional development with resilience planning to defend the integrity of the European innovation ecosystem in a volatile global landscape.

Dr. Genoveva Aparicio Serrano (p)

Groundwater pollution is a growing hazard to human health and to the correct functioning of ecosystems. This study examines the impact of groundwater pollution on firm performance in an environmentally stressed area in SE Spain. This relationship has been previously analysed in environmental economics and financial studies from a variety of theoretical perspectives leading to very different conclusions. Although the most recent studies find a negative impact of local environmental pollution on firm performance there is still an open question about how to measure the environmental performance. In this sense, this paper introduces the actual groundwater pollution of the last assessment for Spain according to the EU Nitrates Directive 91/676/CEE to test an alternative version of the Porter hypothesis (PH) from a geographical perspective. According to the PH firms’ financial performance can improve from a stricter environmental regulation. We postulate an alternative hypothesis around the nexus between environmental performance and financial performance. The main question to be tested in this study is whether the absence of effective regulation against pollution, proxied by the firms’ exposure to high levels of pollution, is affecting firm’ performance, measured with the probability of failure. To identify the direction and quantify the effect we use firm-level panel data from the SABI database for a five-year period. Then the existence of a spatial contagion effect among close firms is evaluated through a spatial econometric model. The last question is whether some firms are gaining and some others losing from the absence of effective regulation. The main conclusion is that exposure to environmental pollution is more detrimental for firms’ survival than firms’ size, age and profitability ratios like ROA and ROE, and this effect is bigger for service sector businesses. Finally, we find no evidence about firms of any economic sector gaining from the absence of effective regulation against nitrate pollution. Therefore, this paper empirically demonstrates the existence of significant environmental-financial nexus and give strong support to a stricter application of EU Directives against pollution.

Dr. Grigor Hayrapetyan (p), Ms Narine Mirzoyan (p), Dr. Nonna Khachatryan

This paper conceptualizes high-skilled emigration (brain drain) as a macroeconomic risk in the context of ongoing regional developments, focusing on the case of the Republic of Armenia. As a small and open economy undergoing structural transformation and increasing regional integration, Armenia faces intensified labor mobility, capital flows, and geopolitical realignments that reshape its economic environment. While regional connectivity initiatives and economic liberalization create new growth opportunities, they simultaneously increase the risk of accelerated outflow of highly qualified human capital.
The study examines brain drain not merely as a demographic or social phenomenon, but as a structural macroeconomic risk affecting long-term productivity, innovation capacity, fiscal sustainability, and economic resilience. By analyzing data on the Brain Drain Index, remittances, foreign direct investment (FDI), wages, and unemployment for the period 2013–2024, the paper evaluates the scale, dynamics, and determinants of high-skilled emigration from Armenia. The findings suggest that skilled labor mobility is influenced less by domestic wage and unemployment fluctuations and more by geopolitical shocks, migration networks, institutional constraints, and structural vulnerabilities of the economy.
Although remittances and diaspora linkages contribute to short-term macroeconomic stabilization, excessive reliance on external inflows does not compensate for the long-term loss of human capital. The paper argues that in the context of regional transformation, brain drain must be incorporated into the national macroeconomic risk management framework. Sustainable development requires coordinated migration policies, improved migration data systems, institutional strengthening, and targeted measures aimed at retaining and attracting highly skilled professionals.

Prof. Andrea Antonio Caragliu (p), Prof. Roberto Dellisanti, Luis Antonio Galiano Bastarrica, Dr. Jorge López Álvarez, Iban Ortuzar Fernández, José M. Rueda-Cantuche

We examine the substitution impact of critical raw materials in European Union regions on internal production capabilities, assessing its economic impact in terms of output, value added and employment. Utilising a regional input-output analysis modelling framework, we assess direct and spillover economic implications, feasibility, and potential benefits of substituting materials of the Critical Raw Material list with domestic EU production.
Results suggest a multifaceted impact of this substitution. In some EU regions, replacement can represent an opportunity for economic growth and diversification of activities. In other areas, negative impacts prevail.
Our analysis does not include an integration of the environmental externalities associated to increased mining activities. Results should be interpreted as the price of EU independence on critical raw materials.