Original scientific paper
https://doi.org/10.18045/zbefri.2026.1.5
The Relationship Between Environmental Performance and Economic Development: Evidence from European Countries
Milan Stamenković
; University of Kragujevac, Faculty of Economics
Marina Milanović
; University of Kragujevac, Faculty of Economics
*
* Corresponding author.
Abstract
Building on the fact that without strong efforts to preserve the natural environment and mitigate the consequences of climate change, no development can remain sustainable in the long term, the primary objective of this paper is to investigate the relationship between environmental performance and achieved economic development of selected European countries. For the realization of defined objectives, an innovative (two-stage) research methodology was employed, based on the combined application of cluster analysis and one-way ANOVA. The classification of 38 European countries into distinctive groups, based on the values of three key components of the Environmental Performance Index (EPI) in 2023, was performed using the hierarchical agglomerative clustering procedure. The obtained “optimal” solution, consisting of three clusters, supplemented by the results of the ANOVA-based evaluation of its statistical quality, unequivocally confirms the presence of pronounced disparities among the observed countries in terms of recorded environmental performance. The formed groups with assigned categories (i.e., high, average and low environmental performance) were used as the independent variable in the second stage of the analysis, designed to examine the statistical significance of differences between the average GDP per capita values determined for the three EPI-based clusters of countries. The ANOVA results unequivocally confirm the presence of a positive and statistically significant relationship between achieved economic development and EPI-based environmental performance, among the observed European countries in 2023. The obtained research results can provide valuable insights for sustainability policymakers and a better understanding of the nature of the relationship between the economic and environmental performances.
Keywords
cluster analysis; one-way ANOVA; environmental performance index; GDP per capita; European countries
Hrčak ID:
348632
URI
Publication date:
30.6.2026.
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