Factors shaping corporate green economy practices in Kyrgyzstan and Georgia
Kamalbek Karymshakov*, Dastan Aseinov
Kyrgyz-Turkish Manas University, Chyngyz Aitmatov Avenue, 56, Bishkek, 720020, Kyrgyz Republic
Email: kamalbek.karymshakov@manas.edu.kg
Dastan Aseinov: dastan.aseinov@manas.edu.kg
https://doi.org/10.29258/CAJSCR/2024-R1.v3-2/89-113.eng
Thematic cluster: Environmental Science, Sustainability
Type of paper: Research paper
December 29, 2024

Abstract
Environmental practices by private businesses are important for transiting to green economy. Against the backdrop of scarce empirical literature on green economy practices in the Central Asian Region, this study aims to examine factors affecting corporate green economy practices in Georgia and Kyrgyzstan using the most recent enterprise survey dataset, as well as contribute to the discussion of the green economy driving factors from enterprises’ perspective. Green economy practices are assessed based on CO2 monitoring and energy management actions. The study’s empirical findings suggest that along with general business characteristics access to finance and energy costs drastically impact the adoption of green economy routines in the private sector. Interestingly, the use of foreign technology and international certification have demonstrated positive effects only in the sample of Georgia, without any statistically significant manifestations in Kyrgyzstan. Moreover, only large firms have shown positive trends in adopting CO2 monitoring and energy management measures. These findings imply the need for adjusting targeted green economy state policies to specific country contexts.
Download the Paper
Available in English
For citation: Karymshakov K., Aseinov D. (2024). Factors shaping corporate green economy practices in Kyrgyzstan and Georgia. Central Asian Journal of Sustainability and Climate Research, 3(2), 89-113. https://doi.org/10.29258/CAJSCR/2024-R1.v3-2/89-113.eng
Rerefences
24.kg. (2024, October 7). National Bank approves roadmap for implementation of ESG principles. https://24.kg/english/316015_national_bank_approves_roadmap_for_implementation_of_esg_ principles/
Ali, J., & Singh, S. (2024). Does the size of the firm matter in determining the adoption of green economy practices in India? International Journal of Social Economics, 52(4), 561-577. https:// doi.org/10.1108/ijse-11-2023-0918
Alraja, M. N., Imran, R., Khashab, B. M., & Shah, M. (2022). Technological Innovation, Sustainable Green Practices and SMEs Sustainable Performance in Times of Crisis (COVID-19 pandemic). Information Systems Frontiers, 24(4), 1081–1105. https://doi.org/10.1007/s10796-022-10250-z
Arocena, P., Orcos,R., & Zouaghi, F. (2021). The impact of ISO14001 on firm environmental and economic performance: The moderating role of size and environmental awareness. Business strategy and the environment, 30(2), 955-967, https://doi.org/10.1002/bse.2663
Benincasa, R., Betz, F., & Gattini, L. (2024). How do firms cope with losses from extreme weather events? Journal of corporate finance, 84, 102508. https://doi.org/10.1016/j.jcorpfin.2023.102508
Bodjongo, M. J. M., Fofana, M., & Epse Essomme, F. K. O. (2023). Firm size and pro-environmental behavior in Cameroon. Environmental Economics, 14(1), 47. http://dx.doi.org/10.21511/ ee.14(1).2023.05
Bouchmel, I., Ftiti, Z., Louhich, W., & Omri, A. (2024). Financing sources, green investment, and environmental performance: Cross-country evidence. Journal of environmental management, 353, https://doi.org/10.1016/j.jenvman.2024.120230
Brollo, N. G., Teodoru, I. R., Karapetyan, N., Ustyugova, Y., van Houtte, J., Jonas, J., Shi, W., Arzoumanian, S., Tintchev, K. I., Tuuli, M., Saliba, F., Talishli, F., El-Said, M., & Fernanda. (2023, june 8). Paving the way to more resilient, inclusive, and greener economies in the Caucasus and Central Asia. https://www.imf.org/en/publications/departmental-papers-policy-papers/ issues/2023/05/26/paving-the-way-to-more-resilient-inclusive-and-greener-economies-in-the-caucasus-and-532116
Brucal, A., & Dechezleprêtre, A. 2021). Assessing the impact of energy prices on plantlevel environmental and economic performance: Evidence from Indonesian manufacturers. OECD environment working papers, (170), 0_1-47, https://doi.org/10.1787/9ec54222-en
Brunelli, S., Murzakhmetova, A., & Falivena, C. (2022). Environmental auditing in rural areas: Current patterns and future challenges in Central Asia. Sustainability, 14(22), Article 22. https://doi. org/10.3390/su142215163
Ergasheva, S. T., Zinovyeva, I. S., Abdurashitov, A. A., Kopytina, Y. A., & Makarova, T. V. (2023). ESG investments in support of the development of the green economy in Russia and Central Asia. In E. G. Popkova & B. S. Sergi (Eds.), ESG management of the development of the green economy in Central Asia (pp. 419–428). Springer International Publishing. https://doi.org/10.1007/978-3- 031-46525-3_44
Frondel, M., Krätschell, K., & Zwick, L. ( (2018). Environmental management systems: Does certification pay? Economic analysis and policy, 59, 14–24. https://doi.org/10.1016/j.eap.2018.02.006
Government of Georgia. (2021). Georgia’s 2030 Climate Change Strategy and Action Plan. Food and agriculture organization of the united nations. https://faolex.fao.org/docs/pdf/geo209870.pdf
Guo, R., Lv, S., Liao, T., Xi, F., Zhang, J., Zuo, X., Cao, X., Feng, Z., & Zhang, Y. (2020). Classifying green technologies for sustainable innovation and investment. Resources, Conservation and Recycling, 153, 104580. https://doi.org/10.1016/j.resconrec.2019.104580
Harakati, R., Ghazouani, I., & Hlioui, Z. (2024). CEO gender and climate change commitment: The mediating effect of environmental regulation perception. Corporate Social Responsibility and Environmental Management, 31(5), 4630–4650. https://doi.org/10.1002/csr.2809
Hu, Y., Tu, T., & Lei, Z. (2024). Impact of corporate environmental goals on compliance behaviors in European Union food industry: A cross-country analysis. Journal of Cleaner Production, 444, 141212. https://doi.org/10.1016/j.jclepro.2024.141212
International Monetary Fund. (2022, September 23). Poor and vulnerable countries need support to adapt to climate change. Retrieved from https://www.imf.org/en/Blogs/Articles/2022/03/23/ blog032322-poor-and-vulnerable-countris-need-support-to-adapt-to-climate-change
Iram, R., & Zhang, J. (2022). Assessing the role of financial inclusion and financial development to improve energy and environmental efficiency. Environmental Science and Pollution Research, 29(33), 49948–49965. https://doi.org/10.1007/s11356-022-18942-4
Isiksal, A. Z., Assi, A. F., Zhakanov, A., Rakhmetullina, S. Z., & Joof, F. (2022). Natural resources, human capital, and CO2 emissions: Missing evidence from the Central Asian states. Environmental Science and Pollution Research, 29(51), 77333–77343. https://doi.org/10.1007/s11356-022- 21227-5
Jun, W., Ali, W., Bhutto, M. Y., Hussain, H., & Khan, N. A. (2019). Examining the determinants of green innovation adoption in SMEs: A PLS-SEM approach. European Journal of Innovation Management, 24(1), 67–87. https://doi.org/10.1108/ejim-05-2019-0113
Karymshakov, K., Sulaimanova, B., & Aseinov, D. (2019). Determinants of innovation activity of small and medium-sized enterprises in small Post-Soviet countries. Business and Economics Research Journal, 10(1), 1–12.
Kök, A. G., Shang, K., & Yücel, Ş. (2016). Impact of electricity pricing policies on renewable energy investments and carbon emissions. Management Science, 64(1), 131–148. https://doi.org/10.1287/ mnsc.2016.2576
Laskurain, I., Ibarloza, A., Larrea, A., & Allur, E. (2017). Contribution to energy management of the main standards for environmental management systems: The case of ISO 14001 and EMAS. Energies, 10(11). https://doi.org/10.3390/en10111758
Li, W., Chen, X., Huang, J., Gong, X., & Wu, W. (2022). Do environmental regulations affect firm’s cash holdings? Evidence from a quasi-natural experiment. Energy Economics, 112, 106151. https://doi. org/10.1016/j.eneco.2022.106151
Lin, C.-Y., & Ho, Y.-H. (2011). Determinants of green practice adoption for logistics companies in China. Journal of Business Ethics, 98(1), 67–83. https://doi.org/10.1007/s10551-010-0535-9
Naimoglu, M. (2023). The effect of energy prices, energy losses, and renewable energy use on CO2 emissions in energy-importing developing economies in the presence of an environmental Kuznets curve. Environmental Science and Pollution Research, 30(20), 58755–58772. https://doi. org/10.1007/s11356-023-26656-4
National Bank of Georgia. (2024, October 12). Sustainable finance. https://nbg.gov.ge/en/page/ sustainable-finance
OECD. (2022, october 3). Green Economy Transition in Eastern Europe, the Caucasus and Central Asia. OECD Green Growth Studies. OECD Publishing. https://doi.org/10.1787/c410b82a-en
Otrachshenko, V., Hartwell, C. A., & Popova, O. (2023). Energy efficiency, market competition, and quality certification: Lessons from Central Asia. Energy Policy, 177. https://doi.org/10.1016/j. enpol.2023.113539
Pampel, F. C. (2020). Logistic regression: a primer (2nd ed.). SAGE publications
Perdichizzi, S., Buchetti, B., Cicchiello, A. F., & Dal Maso, L. (2024). Carbon emission and firms’ value: Evidence from Europe. Energy Economics, 131, 107324. https://doi.org/10.1016/j. eneco.2024.107324
Petreski, M., Tanevski, S., & Stojmenovska, I. (2024). Employment, labor productivity and environmental sustainability: Firm-level evidence from transition economies. Business Strategy & Development, 7(1), e347. https://doi.org/10.1002/bsd2.347
Reis, C., Benvenutti, L., Campos, L., & Uriona, M. (2020). The influence of company size on energy management systems adoption: A system dynamics model. Brazilian Business Review, 17(5), 579– 600. https://doi.org/10.15728/bbr.2020.17.5.6
Rodrigues, M., & Franco, M. (2023). Green innovation in small and medium-sized enterprises (SMEs): A qualitative approach. Sustainability, 15(5), Article 5. https://doi.org/10.3390/su15054510
Sam, A. G., & Song, D. (2022). ISO 14001 certification and industrial decarbonization: An empirical study. Journal of Environmental Management, 323. https://doi.org/10.1016/j.jenvman.2022.116169
Siewers, S., Martínez-Zarzoso, I., & Baghdadi, L. (2024). Global value chains and firms’ environmental performance. World Development, 173, 106395. https://doi.org/10.1016/j.worlddev.2023.106395
Stockholm Environment Institute. (2024, september 27). Green goals and economic gains: shedding light on Georgia’s energy and climate strategy. https://www.sei.org/features/green-goals-Georgia-climate/#:~:text=the%20primary%20objective%20of%20formulating,green%20development%2c%20 and%20innovative%20technologies
The Ministry of Economy and Commerce of the Kyrgyz Republic. (n.d.). Draft program for the development of a green economy in the Kyrgyz Republic until 2028. https://mineconom.gov.kg/ ru/direct/302/335
The Ministry of Economy and Sustainable Development of Georgia. (2022). SME development strategy of Georgia 2021–2025. https://www.economy.ge/uploads/files/2017/ek__politika/sme_ strategy/2022/sme_strategy_2021_2025_eng.pdf
Thøgersen, J. (2021). Consumer behavior and climate change: Consumers need considerable assistance. Current opinion in behavioral sciences, 42, 9–14. https://doi.org/10.1016/j.cobeha.2021.02.008
Tingey-Holyoak, J., Cooper, B., Crase, L., & Pisaniello, J. (2024). Business strategies to counter climate change risks to long lived production assets. Journal of Cleaner Production, 459, 142553. https://doi.org/10.1016/j.jclepro.2024.142553
Ullah, F., Jiang, P., Ntim, C. G., Shahab, Y., & Jiang, X. (2022). Female directors’ foreign experience and environmental and sustainable performance. Asia-Pacific Journal of Financial Studies, 51(2), 169–193. https://doi.org/10.1111/ajfs.12369
UNEP FI. (2023, April). Climate risks in the Industrials Sector. https://www.unepfi.org/themes/ climate-change/climate-risks-in-the-industrials-sector/
Vakulchuk, R., Daloz, A. S., Overland, I., Sagbakken, H. F., & Standal, K. (2023). A void in Central Asia research: Climate change. Central Asian Survey, 42(1), 1–20. https://doi.org/10.1080/02634937 .2022.2059447
Weick, V. (2016). Green economy and sustainable development. In Waste Management and the Green Economy (pp. 121–150). Edward Elgar Publishing. https://doi.org/10.4337/9781783473816.00016
World Bank. (2024). Enterprise Surveys. Retrieved from https://www.enterprisesurveys.org
Zhou, J., Yin, Z., & Yue, P. (2023). The impact of access to credit on energy efficiency. Finance Research Letters, 51. https://doi.org/10.1016/j.frl.2022.103472
This post is also available in: Русский (Russian)
CO2, Georgia, green economy, Kyrgyzstan, sustainable development