Abstract
This study examines the causal relationship between technological innovation and energy efficiency in Central and Eastern European countries. The results indicate that technological innovation significantly impacts energy efficiency in the Czech Republic, Latvia, Lithuania, Slovakia, and Slovenia through various economic and political factors. Conversely, energy efficiency also significantly affects technological innovation in Estonia, Hungary, and Slovakia. These findings suggest that energy efficiency is a function of the rate of innovation adoption. It is recommended that these countries prioritize implementing reforms that bolster economic freedom and institutional quality to foster innovation.
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