The Role of Human Development Index, Technological Innovations and Environmental Taxes in Sustained Economic Growth—Evidence from MMQR Method

The pursuit of sustained economic growth remains a fundamental objective for all nations, as it directly contributes to improving living standards and the overall quality of life for citizens. This research examines how human development, technological innovation and environmental taxation influence long-term economic performance across twenty-two European Union (EU) countries over the 1990 to 2022 period. Method of Moments Quantile Regression (MMQR) is employed for data analysis and the robustness check is achieved by employing the Pooled Mean Group (PMG) and Panel Corrected Standard Errors (PCSE) methods. Key findings reveal the importance of human development, research and development and investment by sector in raising the Gross Domestic Product (GDP) per capita. Moreover, the MMQR findings shows that environmental taxes exhibit positive relationships with GDP per capita in the lower and middle quantiles, while insignificant relationships prevail in the upper quantiles. Therefore, environmental taxes are subject to some upper limits on their influence on GDP per capita. Once the threshold is achieved, environmental taxes tend to harm production. The PCSE findings show that the relationship of environmental taxes and GDP per capita is a weak positive one, while the PMG results shows that these factors are negatively related. Renewable energy is observed to be negatively related with GDP per capita as supported by the MMQR, PMG and PCSE results. These findings offer valuable policy implications, reinforcing the importance of aligning economic strategies with the Sustainable Development Goals (SDGs) to foster inclusive and environmentally sustainable growth within the European context.