Industrial Structure and Ecological Sustainability: Evidence From Small‐Scale Industries in Nordic Countries
Corporate Social Responsibility and Environmental Management
Published online on July 05, 2026
Abstract
["Corporate Social Responsibility and Environmental Management, EarlyView. ", "\nABSTRACT\nThis study examines how industrial structure is associated with ecological sustainability in Nordic countries over the period 2001–2022. The analysis focuses on the share of small‐scale industries in the industrial system and examines its association with ecological sustainability, measured by the load capacity factor. Unlike much of the existing literature, which largely relies on firm‐level approaches, this study adopts a macro‐level perspective and considers how the composition of production is linked to environmental outcomes. The empirical analysis is based on a cross‐sectionally augmented ARDL (CS‐ARDL) framework that accounts for cross‐sectional dependence and distinguishes between short‐run and long‐run relationships. The results show that the share of small‐scale industries is positively associated with ecological sustainability in the long run, while no significant short‐run effect is observed. This suggests that the environmental relevance of small‐scale production becomes more visible over time through gradual structural adjustment. To assess the stability of this result, the study employs leave‐one‐out sensitivity analysis and an alternative estimation using Driscoll–Kraay. The positive long‐run association remains consistent across specifications. In addition, a quantile‐based analysis is used to examine whether this relationship varies across different levels of ecological performance. The results indicate that the association persists across central quantiles, although its magnitude varies. Other variables, including the energy transition, economic growth, and globalization, are included as controls and yield findings broadly consistent with the existing literature. Overall, the study provides new macro‐level evidence on the association between the structural weight of small‐scale industries and ecological sustainability in Nordic countries.\n"]