ASSESSING THE IMPACT OF ENERGY TRANSITION IN ENHANCING THE ECONOMIC PROSPERITY OF SMALL BUSINESSES

This study investigates the pivotal role of green transition policies in fostering small business development, offering a viable strategy for nations pursuing accelerated green economic growth. Utilizing the Common Correlated Effects Mean Group (CCEMG)-Autoregressive Distributed Lag (ARDL) methodology, our research examines a crucial knowledge gap regarding China’s small business sustainability transformation. We analyze panel data from 100 green energy enterprises spanning 2015–2022, yielding important insights. The empirical results demonstrate that short-term economic prosperity increases by 0.35% for every 1% growth in net revenues, while earnings per share (EPS) improvements contribute a 0.15% gain. Long-term elasticities prove more substantial, with 0.56% and 0.26% prosperity gains from net revenues and EPS respectively, underscoring the compounding benefits of sustained financial performance. Among control variables, Information and Communication Technology (ICT) investments emerge as significant positive contributors, contrasting with the adverse effects of disproportionate expenditures. These findings suggest small enterprises should strategically balance expenditure management with targeted investments in digital infrastructure and sustainable practices to optimize prosperity outcomes.