capital structure of smes a systematic literature review and bibliometric analysis

Capital structure of SMEs: a systematic literature review and bibliometric analysis

Satish Kumar , R. Sureka , Sisira R. N. Colombage

Nov 13, 2019

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Capital structure of smes is influenced by market conditions, financial decisions, and credit rationing, with theory testing being a major focus..

Capital structure is the outcome of market conditions, financial decisions taken by the firm, and credit rationing of fund providers. Research on the capital structure of small and medium enterprises (SMEs) has gained momentum in recent years. The present study aims to identify key contributors, key areas, current dynamics, and suggests future research directions in the field of the capital structure of SMEs. This paper adopts a systematic literature review methodology along with bibliometric, network, and content analysis on a sample of 262 studies taken from the Web of Science database to examine the research activities that have taken place on this topic. Most influential papers are identified based on citations and PageRank, along with the most influential authors. The co-citation network is developed to see the intellectual structure of this research area. Applying bibliometric tools, four research clusters have been identified and content analysis performed on the papers identified in the clusters. It is found that the major research focus in this area is around theory testing—mainly, pecking order theory, trade-off theory, and agency theory. Determinants of capital structure, trade credit, corporate governance, and bankruptcy are also the prominent research topics in this field. Also, this study has identified the research gaps and has proposed five actionable research directions for the future.

Capital structure of SMEs: a systematic literature review and bibliometric analysis

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Capital structure determinants of small and medium-sized enterprises: evidence from Central and Eastern Europe

Journal of Small Business and Enterprise Development

ISSN : 1462-6004

Article publication date: 16 February 2021

Issue publication date: 17 March 2021

The main aim of the paper is to examine the small and medium-sized enterprises’ (SMEs) capital structure determinants in Central and Eastern Europe (CEE) (Poland, Czechia, Slovakia, Hungary, Bulgaria and Romania).

Design/methodology/approach

The authors used panel models to analyze financial data of 15,253 companies operating in the years 2014–2017.

The authors confirmed the dominant role of firm-specific factors. Industry and country variables explain only 4% of debt variability of the surveyed companies. The direction of influence of the diagnosed firm-specific factors is consistent with the pecking order theory. About one-fourth of SMEs in CEE hold a stock of debt capacity. It negatively affects the share of debt in the capital. The authors did not confirm the influence of the systematic industry business risk.

Research limitations/implications

The limitations of the study are (1) the inclusion of only six CEE countries in the sample; (2) the exclusion of microenterprises from the sample; (3) the capital structure relationships are observed following the applications of static panel; (4) the endogeneity issue has not been addressed in the model.

Practical implications

This study shows that business-friendly institutional environment is an important factor influencing the indebtedness of companies. It increases the leverage and, consequently, the return on equity, especially in CEE countries.

Originality/value

SME analyses in CEE countries are not as frequent as for other regions. Despite the classical determinants of the SMEs' capital structure, the authors have included debt capacity and systematic industry business risk in this study.

• Capital structure determinants
• Capital structure theories
• Small and medium-sized enterprises
• Central and Eastern Europe

Czerwonka, L. and Jaworski, J. (2021), "Capital structure determinants of small and medium-sized enterprises: evidence from Central and Eastern Europe", Journal of Small Business and Enterprise Development , Vol. 28 No. 2, pp. 277-297. https://doi.org/10.1108/JSBED-09-2020-0326

Emerald Publishing Limited

Copyright © 2021, Leszek Czerwonka and Jacek Jaworski

Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode .

1. Introduction

The most numerous as well as the most significant group of economic entities in the European Union (EU) is the small and medium-sized enterprise (SME) sector. In 2015, it comprised 99.8% of all 23.5 m businesses in the EU. It generated 55.8% of turnover and employed 66.3% of workers in the business sector ( Eurostat, 2015 ). While highlighting the role of this sector in the European economy, one cannot ignore the main barrier to its development, namely the difficulty of accessing sources of finance ( Beck and Demirguc-Kunt, 2006 ; European Commission, 2007 ; Beck et al. , 2008 ; Palacín-Sánchez et al. , 2013 ; European Central Bank, 2014 ; Kumar and Rao, 2015 ; Baños-Caballero et al. , 2016 ; Kersten et al. , 2017 ). That is why the research on the SMEs' capital structure is particularly important.

Research on the capital structure of enterprises has been going on for over half of a century. It also concerns SMEs. For this sector, the following two main capital structure theories are prevalent in the literature ( Martinez et al. , 2019 ): (1) the trade-off theory ( Baxter, 1967 ; Kraus and Litzenberger, 1973 ; Scott, 1976 ; Kim, 1978 ) and (2) the pecking order theory ( Myers, 1984 ; Myers and Majluf, 1984 ). There are many empirical studies showing that companies' decisions are influenced by a number of factors. These factors can be classified into three basic groups ( Hall et al. , 2004 ; Psillaki and Dasaklakis, 2009 ; Jõeveer, 2013 ; Moritz et al. , 2016 ; Kenourgios et al. , 2019 ): firm, industry and country-specific factors.

The structure of SME capital in the “old” EU countries is often examined ( Hall et al. , 2000 ; Sánchez-Vidal and Martín-Ugedo, 2005 ; López-Gracia and Sogorb-Mira, 2008 ; Aybar-Arias et al. , 2012 ; Baños-Caballero et al. , 2012 ; Jõeveer, 2013 ; Palacín-Sánchez et al. , 2013 ; Ughetto et al. , 2017 ). However, in the EU, a group of countries with a short market economy tradition (Central and Eastern Europe – CEE) adopted to the EU after 2004 can be distinguished. Although the SME sector plays a similar role within them, the conditions for its management differ significantly from the mature economies of Western Europe. Research on the SMEs' capital structure in CEE markets does not have a long tradition and is not as developed as in Western Europe ( Mateev et al. , 2013 ; Harc, 2015 ; Belas et al. , 2018 ; Kenourgios et al. , 2019 ). This assumption is supported by literature review conducted by Martinez et al. (2019) . Searching for an answer to the question which theory of SME capital structure is reflected in empirical research, the authors made a systematic review based on 3,549 studies distributed in the years 1959–2017. One research gap found concerned the lack of studies related to emerging economies. The other literature review conducted by Kumar et al. (2020) including 262 articles published in the years 2012–2017 proved that one of the most prevalent topic in the literature concerns determinants of SME capital structure. At the same time, the authors indicated that it would be worth extending this research to other determinants, not covered by studies carried out so far.

The main aim of the paper is to examine the SMEs' capital structure determinants in CEE countries. In addition to the frequently investigated determinants, our study also included additional factors: debt capacity and systematic industry business risk. The study covered six countries: Poland, Czechia, Slovakia, Hungary, Bulgaria and Romania.

The results of our study complement and strengthen some of the findings to date. We confirmed SMEs' debt being mainly determined by firm-specific factors. However, the impact of factors at the industry and country level is more than twice as weak in CEE as in more developed economies. We demonstrate that all classical firm-specific factors significantly affect the capital structure of SMEs. The direction of this impact is consistent with the pecking order theory. As in other economies, the indebtedness of companies in CEE depends significantly on the financial risk of a given industry. We show that the degree of friendliness of the legal and institutional business environment and access to credit in the private sector are institutional country-specific factors that significantly increase corporate indebtedness. Among the macroeconomic country-specific factors, the country's economic growth dynamics have a positive impact on debt, while the rising cost of debt has a negative impact.

Our research also brings new elements to the existing knowledge. We showed that more than one-fourth of SMEs in CEE maintained a stock of debt capacity throughout the entire research period. Membership of this group of companies was negatively correlated with the share of debt in capital. This behavior of SMEs is consistent with the pecking order theory. The study also shows that SMEs' indebtedness in CEE does not depend on systematic industry business risk. This result contradicted the previous findings regarding the sector of large companies.

The paper is structured as follows: the first part presents theories and determinants of enterprises' capital structure. It also outlines the current state of theoretical and empirical research related to firms' financing behavior in SME sector. On this basis, the research hypotheses have been developed and the studied variables have been specified. In the second part of the paper, methods applied in empirical study and collected research material are described. The results of the research and their embedding in the existing achievements are presented in the third part of the paper. The final section includes discussion on the results and conclusions of the research.

2. Theoretical and empirical background

There is a well-established opinion in the literature that SMEs have difficult access to external capital. This view is confirmed by numerous studies ( Beck and Demirguc-Kunt, 2006 ; Beck et al. , 2008 ; Palacín-Sánchez et al. , 2013 ; Kumar and Rao, 2015 ; Baños-Caballero et al. , 2016 ; Kersten et al. , 2017 ) as well as the opinion of entrepreneurs themselves ( European Commission, 2007 ; European Central Bank, 2014 ). The most common reasons for this are the following ( Brav, 2009 ): (1) high credit risk for financing projects with a small size and short lifespan, (2) lack of reliable financial information based on regular financial reports, (3) lack of sufficient credit collateral and (4) high business risk for SMEs. However, at the same time, the prior studies showed significantly higher growth rates of small companies compared to large companies ( Evans, 1987 ). This, in turn, determines a noticeably greater dynamics of capital demand and a wider use of self-financing ( Watson and Wilson, 2002 ; Brighi and Torluccio, 2010 ). Mac an Bhaird and Lucey (2010) also noted that the faster the SME sector developed, the more willing it was to use venture capital funds or business angels, i.e. various external forms of increasing equity. These observations form a premise for the diagnosis of specific conditions of the SMEs’ capital structure.

The beginning of research on the capital structure is the work of Modigliani and Miller (1958) . They demonstrated that in a perfect capital market, the cost of capital, and thus the market value of a company, is independent of the capital structure. This original theory was modified by introducing the adjustments resulting from market imperfections into the model. Criticism of these models led to several further concepts. As Martinez et al. (2019) and Kumar et al. (2020) showed, two of them are relevant for SME sector.

The trade-off theory is the first concept prevalent in the literature related to SMEs. According to its static version, when shaping their capital structure, companies compare the costs of financial distress and bankruptcy with the expected tax benefits associated with debt financing. Debt creates tax shields and acts as a discipline for managers by creating incentives to increase its share in capital. However, debt is also associated with the costs of servicing it, leading to financial difficulties and bankruptcy, which in turn create incentives to reduce the debt. This means that there is an optimal capital structure when these benefits and costs are equal ( Baxter, 1967 ; Kraus and Litzenberger, 1973 ; Scott, 1976 ; Kim, 1978 ). The dynamic version of trade-off theory is also well documented in the literature. It foresees that companies, either by getting indebted or repaying debts at a certain pace, adjust their capital structure to an optimum. This level of debt is associated with the determined minimum of adjustment costs function by a change in cost of financial distress, on the one hand, and by benefits from tax shield on the other hand ( Huang and Ritter, 2005 ; Leary and Roberts, 2005 ; Kayhan and Titman, 2007 ; Lemmon et al. , 2008 ).

The pecking order theory is the second concept referred to the literature. On basis of the theoretical arguments of an adverse selection, Myers (1984) and Myers and Majluf (1984) formulated the theory that the increase in the company's financing needs is met according to a certain hierarchy. As the first source, companies use the capital generated (retained earnings), then issue debt until the debt capacity is exhausted, then issue hybrid instruments and finally raise external equity. The model does not predict a target or optimal capital structure. Structure is a function of aggregated policies related to profitability creation, dividend payments and investment opportunities ( Klein et al. , 2002 ; Bharath et al. , 2009 ).

Prior research provides evidence that companies' financial decisions are determined by a number of economic and institutional factors, which can be divided into three groups ( Michaelas et al. , 1999 ; Hall et al. , 2000 , 2004 ; Psillaki and Dasaklakis, 2009 ; Frydenberg, 2011 ; Jõeveer, 2013 ; Kenourgios et al. , 2019 ): (1) firm-specific factors, (2) industry-specific factors and (3) determinants on country level (institutional and macroeconomic features of national economies). Michaelas et al. (1999) and Hall et al. (2000) conducted research on the same panel of 3,500 SMEs from the UK operating between 1988 and 1995. The study showed that the impact of firm-specific factors on debt varied from one industry to another. In another study, which concerned 4,000 SMEs from eight Western European countries (Belgium, Germany, Spain, Ireland, Italy, The Netherlands and the UK), Hall et al. (2004) showed that the direction and strength of the impact of the firm-specific factors also varied from country to country. Similarly, Psillaki and Dasaklakis (2009) examined 3,630 SMEs from economies of Greece, France, Italy and Portugal operating between 1997 and 2002. However, they came to slightly different conclusions than their predecessors. The study did not deny the existence of industrial and country-specific factors, but the strength of their impact in comparison with the firm-specific factors was assessed by Psillaki and Dasaklakis (2009) as low. The study of Kenourgios et al. (2019) included financial data of 1,120 listed SMEs from EU countries and the period 2005–2015. Authors find that the effect of firm-specific capital structure determinants does not differ significantly across size and country groups. At the country level, taxation is the most significant for all subgroups studied (core, periphery and new member of EU).

Jõeveer’s study (2013) is an extensive cross-sectional study of the capital structure of SMEs, which covers all levels of capital structure determinants affecting 481,627 SMEs from eight European countries (Germany, France, Italy, the United Kingdom, Belgium, Finland, Portugal, Spain, Sweden, Switzerland) in the years 1995–2002. The author found that the smaller the companies, the greater the impact of country-specific factors on their structure which explained about 10% of the debt variability of the studied companies. At the same time, the study showed that the larger the company, the more important the industry-specific factors became.

Firm-specific factors play a dominant role in explaining the debt variability of SMEs, followed by factors at the country level, and the industry determinants exert the least influence.

Firm-specific factors are justified by the above described capital structure theories. A broad analysis of these theories was carried out, among others, by Harris and Raviv (1991) , Rajan and Zingales (1995) , Frank and Goyal (2009) . It allowed them to identify the most important factors and to determine the direction of their impact depending on the theoretical justification (see Table 9 ).

In the research of Michaelas et al. (1999) , Hall et al. (2000 , 2004) , growth, tangibility, size, age and profitability turned out to be significant firm-specific factors. The faster the company's growth, the greater the short-term debt. The other factors had the opposite effect on short-term debt. For long-term debt, a positive correlation was observed for tangibility and age. Profitability, growth and size did not exert a significant impact. In turn, Psillaki and Dasaklakis (2009) confirmed the strong positive impact of company size on total debt and negative on profitability. Similar relationships were established by Jõeveer (2013) . Moreover, the author identified a negative relationship between tangibility and debt. Kenourgios et al. (2019) detected positive impact of size and tangibility on the indebtedness of the listed SMEs. Opposite direction was found for profitability.

In addition to cross-sectional research, there are also a great number of empirical evidences focused on firm-specific factors accumulated in single economies. Table 1 lists some of them.

Tangibility, size, growth, profitability, liquidity and non-debt tax shields exert a significant impact on SMEs' capital structure.

Directions of the impact of firm-specific factors on SMEs' capital structure are consistent with the pecking order theory.

SMEs with a debt share in the capital structure below the threshold maintain a stock of debt capacity and do not increase their debt.

Research on industry-specific capital structure determinants in the SME sector most often focuses on showing differences in the impact of industry-specific factors. The identification of these factors was done, among others, by Mac an Bhaird and Lucey (2010) and Degryse et al. (2012) . Examining 299 Irish SMEs, Mac an Bhaird and Lucey (2010) noted significant differences in the indebtedness of different industries. These differences depended primarily on the amount of fixed assets in the industry. The higher the level, the less the problem of information asymmetry and the better the collateralization of the debt, and thus, the companies in the industry could become more indebted. In turn, on the basis of data from the Dutch SMEs operating between 2002 and 2005, Degryse et al. (2012) showed that the observed differences in the indebtedness of industries also depended on the level of agency costs related to the nature of their business and competition in the industry.

The industry debt median was used as a variable to explain volatility of SMEs' debt in the study of Jõeveer (2013) . The author assumed, as Frank and Goyal (2009) , that this debt is related to the general situation of the industry. Companies in a given industry aim at a similar financial structure. This is the result of a clash of capital needs determined by the technologies used, the structure of assets, the type of business, etc. and the confidence of creditors, which, in turn, affects debt capacity. Therefore, the industry's median debt is a measure of financial risk. Jõeveer (2013) demonstrated that belonging to an industry with a higher median debt also resulted in a higher share of debt in the capital structure of a single SME.

The share of debt in SMEs' capital structure is positively correlated with the median of the industry's indebtedness and negatively with the systematic business risk of this industry.

Factors shaping the capital structure of SMEs also occur at the country level. The literature divides them into two groups: macroeconomic and institutional factors ( Hernández-Cánovas and Koëter-Kant, 2011 ; Jõeveer, 2013 ; Mac An Bhaird and Lucey, 2014 ; Chipeta and Deressa, 2016 ; Moritz et al. , 2016 ; Kenourgios et al. , 2019 ). The study of Hernández-Cánovas and Koëter-Kant (2011) covered 3,366 SMEs from 19 Western Europe countries for 2002. It showed that the share of debt in the financing of these companies depended mainly on the level of property rights protection. Interestingly, the smaller the company, the stronger the impact. Similar dependence was shown by Mac An Bhaird and Lucey (2014) based on the data of over 90,000 companies from 13 Western European countries operating in the period 2002–2008. The authors found that companies' indebtedness also depended on the quality of the financial system in a given country and cultural environment. With reference to a study of 12,726 SMEs from 28 European countries, Moritz et al. (2016) showed that the indebtedness of businesses depended on the number and structure of operational programs financed by EU funds supporting the SME sector financially and organizationally. An extensive list of country-specific capital structure determinants was also applied by Jõeveer (2013) . The creditor and shareholders protection rights and corruption perception index proved to be important institutional factors (the better the protection and the lower the level of corruption, the higher the debt). Among the macroeconomic factors, gross domestic product (GDP) growth and savings were the main contributors to the increase in debt, while debt declined with a rise in market capitalization and inflation. Almost identical results were obtained by Chipeta and Deressa (2016) by analyzing 412 companies from 13 African countries operating in the years 2003–2008. The recent study conducted by Kenourgios et al. (2019) provides evidence that taxation is the most significant macroeconomic factor shaping the capital structure of listed SMEs in EU countries.

The analysis of the aforementioned studies shows that despite the significant impact of macroeconomic factors, institutional factors are more important for SMEs. Formal (law, procedures, public services for business) and physical (courts, offices, support and advisory institutions) institutions create business environment that, if properly developed, can encourage or deter SMEs from taking additional risks in the form of debt issuance. In turn, a properly developed financial system (banks, capital markets, instruments offered, etc.) provides easier access to capital. It is worth noting that these factors also play an important role at the regional level ( Palacín-Sánchez et al. , 2013 ; Palacín-Sánchez and di Pietro, 2016 ; la Rocca et al. , 2010 ).

The indebtedness of SMEs in CEE depends on main macroeconomic features and the quality of the legal and financial environment of the sector.

It is worth noting that in the case of CEE economies, the achievements of empirical research on the capital structure of SMEs are much more modest than those in Western Europe. This applies to studies of individual economies (see: Table 1 ) as well as cross-sectional studies. The latter include the research of Mateev et al. (2013) and Rahman et al. (2017) . The first study covered the financial data of 3,257 SMEs for the period 2001–2005. The authors did not specify countries but only stated that companies were operating in CEE. Using dynamic panel models, it was confirmed that companies' indebtedness increases with their size as well as with the financial surplus generated. The rate of growth of operating profits had a negative impact on debt. A small and undefined impact of industry factors was also found. Among country-specific factors, the relationship between tax rate and foreign direct investments was examined. For both factors, a positive relationship was found.

Rahman et al. (2017) examined 793 SMEs from Czechia, Slovakia and Hungary operating in 2012–2014. For the typical internal factors, debt dependency was found only on the size of the company (the bigger the company, the higher the debt). This dependence was most evident in the Czech economy. Industry factors were not studied. A weak positive dependence was also found for interest rates (country-specific factor). This dependence was also especially applicable to Czechia.

The identification of the determinants of the listed SME's capital structure for the economies of new EU members (Bulgaria, Croatia, Czech Republic, Slovenia, Slovakia, Estonia, Hungary, Latvia, Lithuania, Malta, Poland and Romania) is also included in the study ( Kenourgios et al. , 2019 ). Based on a panel of 3,267 observations in the period 2005–2015, the author showed that tangibility, sales (size) and business risk positively influenced the debt of enterprises. Only increasing profitability contributed to the reduction in debt. Among the country-specific factors, as for other economies, in new members of EU, SMEs' debt was positively affected by taxation.

3. Data and research sample

The source of research material was the EMIS database on corporate finance [1] . The time range of the study was 2014–2017. It was limited by the data provided. Financial data for SMEs from Bulgaria, Czechia, Hungary, Poland, Romania and Slovakia were taken from EMIS database. The selection of countries was dictated by the following criteria: (1) the date of accession to the EU, (2) the level of economic development, (3) the quantity and quality of data in the EMIS database and above all, (4) the common region: CEE. Such selection of the research sample was of interest for the authors of the study due to their country of origin and at the same time gave the opportunity to compare the results obtained with other countries of the region, which as a whole constitutes an important part of the EU.

The research sample was based on the SME definition established by the European Commission ( European Commission, 2003 ). The sample did not cover microenterprises due to the lack of reliable financial data for most of them. Therefore, the sample included companies that met the following conditions: (1) assets between 2 and 43 m euro, (2) revenues between 2 and 50 m euro and (3) employment between ten and 249 employees. A total of three conditions were taken into account at the same time in the study due to the difficulties in identifying companies that met only two of these conditions.

The breakdown of the companies in the sample was based on the industry classification of the EMIS database (14 industries). Due to the specificity of the industries, agricultural and financial companies were excluded from the sample. Due to the existence of observations which might have been errors in the database, some values of the variables were limited to ranges 0–1 (e.g. share of debt in all sources of financing, share of fixed assets in total assets) and/or to positive values (e.g. equity). The sample was also restricted to avoid the impact of outliers by 1% of the observations from the bottom and top of the distribution.

The study was based on variables, the definitions of which are presented in Table 2 . They are most frequently chosen by other authors, whose research was included in the literature review. We used total debt ratio (DR) to measure the company's capital structure (dependent variable). Variables characterizing classic firm-specific factors are as follows: TANG, SIZE, GROW, PROF, LIQ and NDTS.

At the company level, we included an additional debt capacity (DC) variable with two values: 1 and 0. Companies maintaining stock of DC for the whole research period (three years) were marked 1. The rest were marked 0. As Lev (1969) , Kale and Noe (1992) and Ghosh and Cai (1999) , we assumed that the threshold for DC was the median of the indebtedness of companies in a given country and industry. The negative difference between a company's current debt and the median of the industry's debt in the preceding year meant that the company held a DC stock.

The median debt of companies in a given industry is a variable characterizing financial risk in that industry. As a systematic business risk, following Kale et al. (1991) , Doff (2008) and Baum et al. (2017) , we assumed a weighted average of the coefficient of variation of operating flows of companies in a given industry. The weighting was the share of assets of a given company in the total assets of a given industry.

We used the ease of business score index as a variable characterizing the procedures and legal environment of SMEs in a given country. Access to credit was described by the private sector debt ratio. Annual GDP growth was used as a macroeconomic country-specific factor appropriate to the economic growth rate and inflation was used as a reference for the cost of credit in a given country. Country-level data were taken from the World Bank and International Monetary Fund databases.

Table 3 provides descriptive statistics on the dependent variable and the firm-specific factors used in the study.

For the sampled companies, the arithmetic mean and median values are similar for the following variables: DR, share of fixed assets in total assets (TANG) and company size (SIZE). For the NDTS variable, the difference is greater. For GROW, PROF and LIQ, the difference between the median and the arithmetic mean exceeds 35%. For these three variables, significant variability is also noticeable because the standard deviation is equal to or greater than the arithmetic mean. Therefore, the median should rather be used to analyze the average values in this sample. For minimum and maximum values, it can be seen that the SIZE, GROW and PROF variables have negative minimum values. For the SIZE variable, this means that some enterprises have assets of less than 1 m euro. For the GROW variable, this means that some enterprises have lower sales revenue in subsequent years than before. For the PROF variable, a negative minimum value means that the profitability of some enterprises is negative in some years.

Tables 4 and 5 describe the distribution of industry- and country-specific factors, respectively.

The average indebtedness of companies is around 0.5. The least average indebted industry is pharma and healthcare, for which the mean of debt is 0.455. The highest average indebtedness is in the food and beverage industry with 0.612. In turn, the systematic business risk (IND_Beta) is clearly different from the rest in consumer electronics. It is 1.013, while for all other industries it does not exceed 0.7, and for pharma and healthcare it is only 0.304. The percentage of companies that hold DC varies from 26% (real estate and construction) to 32% (food and beverage) depending on the industry.

In Table 5 , it can be seen that the country with the highest average corporate indebtedness is Slovakia (0.588), while the country with the lowest average is Czechia (0.469). This is a little bit surprising because these countries were one country relatively recently (less than 30 years ago). This disparity does not exist for the percentage of companies holding DC. It is similar for both countries and is below 20%, while in three out of the six countries analyzed, this ratio exceeds 30%. Table 6 also contains descriptive statistics by all countries for indicators such as EASE_BUS, PRIV_DEBT, GDP_GROW, INFLAT, whose values are similar. The exception is PRIV_DEBT in Bulgaria, which is almost twice as big as in the other countries. This may mean that Bulgaria benefits from the greatest private sector access to credit.

Pearson's linear correlation coefficients have been calculated for each of the pairs of variables to exclude any multicollinearity between the variables ( Table 6 ). Most coefficients between the explanatory variables do not show strong correlation. NDTS and TANG variables have the highest values of correlation with other variables. However, values of variance inflation factors (VIFs) below 10 mean that multicollinearity is acceptable.

According to the contents of H1 , the first stage of the study was to check whether the capital structure of companies in particular countries depends on factors related to the industry and country. For this purpose, a two-factor analysis of variance (ANOVA) was applied. This method enables to identify the existence of differences between averages in several populations. In our study, we checked whether the average DR values describing the capital structure of the examined companies differed significantly in the samples of companies from different industries and countries ( Lynch, 2013 ).

regression model (ordinary least squares [OLS] method):

(2)model with fixed effects:

(3)model with random effects:

The OLS is used for homogeneous samples. The Breusch–Pagan test was used in finding individual effects. In order to identify fixed or random characteristics of effects, the Hausman test is applied ( Greene, 2012 ). The estimation of model parameters was used for the verification of H2 and H3 .

The last stage of the study was to diagnose the significance of the influence of other assumed factors on the capital structure of the examined companies ( H4 to H6 ). For this purpose, previously used panel models were supplemented with corresponding variables: (1) characteristics of enterprises in terms of stored DC, (2) industry-specific factors and (3) institutional and macroeconomic country-specific factors. For the extended models, the Breusch–Pagan test was used to check if it was possible to use the OLS model or if there were individual effects. The extended models contain a DC dummy variable. Therefore, if the existence of individual effects is identified, the model with random effects should be used ( Gujarati and Porter, 2009 ).

Since we detected heteroscedasticity and autocorrelation in all our models, which could lead to incorrect estimation of variance and distortion of the significance of specific variables, we applied heteroscedasticity- and autocorrelation-consistent (HAC) standard errors ( Gujarati and Porter, 2009 ).

4. Research outcomes

4.1 anova analysis: impact of industry and country on smes' indebtedness.

In order to determine whether the country and industry differentiated the capital structure of the analyzed companies, a two-factor ANOVA was conducted. The results are presented in Table 7 .

The results show that although the country explains only 2.21% of the total variability and the industry only 1.14%, both analyzed factors statistically significantly influence the changes in corporate debt.

4.2 Panel model analysis: identification of significance and directions of relationships between firm-specific factors and SMEs' capital structure

Table 8 contains the results of estimating the parameters of models containing classical firm-specific factors for individual countries and the whole research sample. The table also includes the results of tests determining the significance of the whole model and indicating the choice of model version.

For the estimation of model parameters for all countries, a model with fixed effects was applied, which was driven by the Breusch–Pagan ( p  < 0.0001) and Hausman ( p  < 0.0001) test values. For easier analysis of the results, all statistically significant relationships (positive or negative) were moved to Table 9 .

In all analyzed economies, the increase in the share of fixed assets in total assets, as well as the growing profitability, liquidity and non-debt tax shield (except for Slovakia), caused a decrease in SMEs' debt. The opposite direction of dependence was diagnosed for the growth rate of enterprises and company size. Among all 36 relationships studied, only 1 relationship did not show statistical significance, while the remaining 35 relationships are fully consistent with the pecking order theory indications. Full compliance was also obtained for the whole sample, without specifying countries.

4.3 Extended panel model analysis: diagnosis of relationships between industry- and country-specific factors and SMEs' capital structure

Table 10 contains estimates of parameters of models extended by additional variables. Model (8) includes DC in addition to classical firm-specific factors. This variable is also present in the other models (9) to (11). All of them showed its statistically significant negative impact on SMEs’ debt.

Subsequent model (9) was extended with industry-specific factors. They are also present in models (10) and (11). IND_DR is statistically significant variable and positively influencing debt. The significance of the influence of IND_Beta was not confirmed by any model.

In model (10), country-specific factors were taken into account. This model shows statistically significant and positive relationships between DR and EASE_BUS and PRIV_DEBT. The macroeconomic country-specific factors were also found to be statistically significant. The higher the GDP growth in a country, the greater the indebtedness of SMEs. In the case of inflation, the relationship is the opposite.

The number of explanatory variables in model (11) has been reduced by the variable IND_Beta, whose significance was not confirmed by any model. In almost all models, there are the same directions of relationship between DR and firm-specific factors. This signifies the positive results of robustness check of these relationships. The exception is the NDTS variable. Models (9) and (10) do not demonstrate a significance of the impact of the NDTS variable on SMEs' debt. In comparison to models (1) to (7), it can be related to the application of the random effects model. This difference is not detected by models (8) and (11), where the statistically insignificant variable IND_BUS was not included.

5. Conclusions

The study shows that the capital structure of SMEs from CEE is shaped primarily by firm-specific factors. The industry-specific factors area explains about 1.2% of the variability of corporate debt, while the country-specific factors area explains about 2.3% of that variability. This is confirmed by Jõeveer (2013) , the much wider impact of SME's country-specific factors on capital structure than industry variables (support for H1 ). However, the combined impact of factors from both areas is less than half as in the case of more developed economies. This observation is consistent with previous studies ( Mateev et al. , 2013 ). However, the causes and nature of these differences require further in-depth research.

We also corroborated H2 by demonstrating a statistically significant dependence of the CEE SMEs' debt on all established firm-specific factors. We therefore obtained confirmation of earlier findings that the smaller the company, the greater the number of diagnosed firm-specific determinants of capital structure ( Sogorb-Mira, 2005 ).

We identified statistically significant negative impact on SMEs' debt of the following variables: tangibility, profitability and liquidity. The positive relation was diagnosed for size and growth. The significance and direction of influence of the firm-specific factors on SMEs' capital structure in CEE are consistent with the pecking order theory. It supports H3 . We also obtained strong support for H4 : SMEs indebted below the DC maintain its stock and do not increase their debt. It is also consistent with the pecking order theory.

The study showed that SMEs' indebtedness is determined by one of the assumed industry-specific factors. Therefore, our study only partially supports H5 . The share of debt in capital structure depends on the financial risk of the industry. Similar to Frank and Goyal (2009) ; Jõeveer (2013 ), we found that if the industry was perceived by creditors as more safe (higher average industry debt), the companies belonging to the industry were more likely to use debt. We did not obtain the same confirmation for systematic industry business risk. This is contrary to the findings made for large companies by Kale et al. (1991) ; Schwert and Strebulaev (2014) ; Palazzo (2019 ). It may be a specific feature of the SME sector, but this thesis requires a broader and more detailed study.

The results of the CEE SMEs' country-specific factors study do not contradict the previously obtained results ( Mateev et al. , 2013 ; Rahman et al. , 2017 ) and support H6 . The institutional country-specific factors analysis provides results similar to those in Jõeveer (2013) . It has been shown that the more business-friendly the legal and institutional environment, the more CEE SMEs are willing to go into debt. We have also shown that with the growing availability of credit in the private sector, corporate debt also increases. The study on macroeconomic country-specific factors also included variables applied by Jõeveer (2013) . The results obtained are also similar. This means that, as in the case of mature economies, CEE SME's debt is positively affected by GDP growth, while the impact of the cost of debt (inflation rate) is negative.

The above results, with institutional variables added, are linked to some practical implications. Our study shows that a business-friendly legal and institutional environment is a very important factor influencing the indebtedness of companies and thus increasing leverage and, consequently, the return on equity. The transition to a market economy in CEE countries took place only 30 years ago. Still, a significant part of society, including businessmen, remembers the obstacles that the state caused to economic activity.

The limitations of the study are (1) the inclusion of only six CEE countries in the sample and (2) the exclusion of microenterprises from the sample, i.e. those enterprises that employ fewer than ten people and whose value and revenue does not exceed 2 m euro. However, it should be noted that the largest economies and the most important countries of the region, which are also members of the EU, are included in the study. Microenterprises' data were excluded mainly due to the low reliability of their financial data. (3) The capital structure relationships are observed following the applications of the static panel and (4) the endogeneity issue is not addressed in the model. However, it should be noted that the problem of endogeneity occurs mainly in the case of simultaneous equation models, measurement errors and omitted variables. In the case of our study, we rely on the single-equation model, and it is not a transformed version of the more complicated model. We also made efforts to remove unreliable data, and estimations of many models with different number of variables did not change the conclusions. Therefore, we believe that this problem did not significantly affect our results.

Empirical studies on SME's capital structure

Note(s): * dependence is significant at the level of 0.1; ** dependence is significant at the level of 0.05; *** dependence is significant at the level of 0.01 (standard errors in parentheses)

Source(s): own elaboration

EMIS (formerly known ISI Emerging Markets Group) was established in 1994. It is a consulting company focused on emerging markets. EMIS operates in and reports on countries where high reward goes hand-in-hand with high risk. It brings information, research and analytical data, peer comparisons and more for over 147 emerging markets ( https://www.emis.com ).

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A Systematic Review of Literature and Comprehensive Bibliometric Analysis of Capital Structure Issue

• Dominika GAJDOSIKOVA University of Zilina https://orcid.org/0000-0001-7705-3264
• Katarina VALASKOVA University of Zilina https://orcid.org/0000-0003-4223-7519

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From economic wealth to well-being: exploring the importance of happiness economy for sustainable development through systematic literature review

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• Shruti Agrawal   ORCID: orcid.org/0000-0002-1620-9429 1 , 5 ,
• Nidhi Sharma 1 , 5 ,
• Karambir Singh Dhayal   ORCID: orcid.org/0000-0002-0000-4330 2 &
• Luca Esposito   ORCID: orcid.org/0000-0001-5983-6898 3 , 4  

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The pursuit of happiness has been an essential goal of individuals and countries throughout history. In the past few years, researchers and academicians have developed a huge interest in the notion of a ‘happiness economy’ that aims to prioritize subjective well-being and life satisfaction over traditional economic indicators such as Gross Domestic Product (GDP). Over the past few years, many countries have adopted a happiness and well-being-oriented framework to re-design the welfare policies and assess environmental, social, economic, and sustainable progress. Such a policy framework focuses on human and planetary well-being instead of material growth and income. The present study offers a comprehensive summary of the existing studies on the subject, exploring how a happiness economy framework can help achieve sustainable development. For this purpose, a systematic literature review (SLR) summarised 257 research publications from 1995 to 2023. The review yielded five major thematic clusters, namely- (i) Going beyond GDP: Transition towards happiness economy, (ii) Rethinking growth for sustainability and ecological regeneration, (iii) Beyond money and happiness policy, (iv) Health, human capital and wellbeing and (v) Policy push for happiness economy. Furthermore, the study proposes future research directions to help researchers and policymakers build a happiness economy framework.

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1 Introduction

Happiness is considered the ultimate goal of human beings (Ikeda, 2010 ; Lama, 2012 ). All economic, social, environmental and political human activities are aligned towards achieving this goal. This fundamental pursuit of human life introduces a new scope of research, namely the ‘happiness economy’ (Agrawal and Sharma 2023 ). The happiness economy is an emerging economic domain wherein many countries are working to envision and implement a happiness-oriented framework by expanding how they measure economic success, which includes wellbeing and sustainability (Cook and Davíðsdóttir 2021 ; Forgeard et al., 2011 ). The investigation of happiness, life-satisfaction and subjective well-being has witnessed increasing research interest across the disciplines- from psychology, philosophy, psychiatry, and cognitive neuroscience to sociology, economics and management (Diener 1984 ; Hallberg and Kullenberg, 2019 ).

In the post-Covid era, the world seeks an enormous transformation shift in the public system (Costanza 2020 ). However, public authorities need more time to realize such needs. To experience the ‘policy transformation’ within the coming few years, we require a paradigm shift that helps warm peoples’ hearts and minds. The new economic paradigm can penetrate the policy processes in advanced economies and every part of the world affected by the epidemic with the support of intellectuals, researchers, entrepreneurs and professionals.

OECD ( 2016 ) proposed a well-being economy framework to measure living conditions and people’s well-being. In 2020, developed countries like Finland, New Zealand, Iceland, Scotland and Wales have become members of the Wellbeing Economy Government (WEGo) (Abrar 2021 ). Since then, the network of government and international authorities across the globe has gained a quick momentum concerning an increasing tendency about a growing tendency to concentrate governmental decisions around human well-being rather than wealth and economic growth (Coscieme et al. 2019 ; Costanza et al. 2020 ).

In light of these circumstances, the purpose of this article is to describe the concept of a “happiness economy” or one that seeks to give everyone fair possibilities for growth, a sense of social inclusion, and stability that can support human resilience (Coyne and Boettke 2006 ). It provides a promising route towards improved social well-being and environmental health and is oriented towards serving individuals and communities (Skul’skaya & Shirokova, 2010 ). Moreover, the happiness economy paradigm is a transition from material production and consumption of commodities and services as the only means to economic development towards embracing a considerable variety of economic, social, environmental and subjective well-being dynamics that are considered fundamental contributors to human happiness (Atkinson et al., 2012 ; King et al., 2014 ; Agrawal and Sharma 2023 ). In following so, it reflects the ‘beyond growth’ approach that empathizes with the revised concept of growth, which is not centred around an increase in income or material production; instead it is grounded in the philosophy of achieving greater happiness for more people (Fioramonti et al. 2019a ).

Whereas the other critiques of economic growth emphasize contraction, frugality and deprivation, the happiness economy relies on a cumulative approach of humanity, hope and well-being, with a perceptive to build a ‘forward-looking’ narrative of ways for humans to live a happy and motivated life by inspiring the cumulative actions and encouraging policy-reforms in the measuring growth of an economy (Stucke 2013 ). Agrawal et al. ( 2023a , b ) explore the domain of happiness economics through a review of the various trends coupled with the future directions and highlight why it needs to be supported for a well-managed economic system and a happy society.

In this paper, we define a “happiness economy as an economy that aims to achieve the well-being of individuals in a nation, promoting human happiness, environmental up-gradation, and sustainability. Alternatively, as an economy where the wellbeing of people counts more than the goals of production and income”. Moreover, we have examined the existing body of research on the happiness economy and analyzed the emerging research themes related to rethinking the conventional approach to economic growth. We conclude by discussing how the happiness economy concept has been accepted so far and realizing its importance by triggering policy reforms at the societal level, by outlining potential future directions that might be included into the current national post-growth policies.

Various researchers and experts in the field of happiness economy support the idea that there is a lack of thorough studies related to the concept, definitions, and themes of the happiness economy model in the nations. This gap has motivated us to conduct a SLR in order to identify the evolution in the domain of happiness economy and to identify the emerging themes in this context. Therefore, this present study seeks to offer a holistic outline of the emerging research area of the happiness economy and helps to understand how the happiness economy can accelerate sustainable development. With the following research questions, this study seeks to give an all-encompassing review of this subject.

What is the annual publication trend in this domain and the most contributing authors, journals, countries etc?

Which themes and upcoming research areas are present in this field?

What directions will the happiness economics study field go in the future?

The SCOPUS database was used to achieve the above research objectives. We have selected 257 articles for examination by hand-selecting the pertinent keywords and going over each one. In the methods section, a thorough explanation of the procedures for gathering, reviewing, and selecting documents is provided.

The remainder of this paper is structured as follows; A thorough survey of the literature on the happiness economy is provided in Sect.  2 . The research approach employed in the study is presented in Sect.  3 . A thorough data analysis of the research findings is given in Sect.  4 . After discussing the results in Sect.  5 , Sect.  6 suggests areas for further research in this field. The study is summarised with a conclusion in Sect.  7 . Section  8 outlines the study’s limitation.

2 Literature review

The supporters of conventional economic growth proclaim that the material production of goods and services and consumption is vital to enhancing one’s living standards. The statement is true to some degree, mainly in countries of enormous deprivation. Some studies have found significantly less correlation between growth and happiness after fulfilling minimum threshold needs (Easterlin 1995 ; Kahneman and Krueger, 2006 ; Inglehart et al., 2008 ). These studies recommend that rather than concentrating solely on economic growth, governmental policy should give priority to non-economic aspects of human existence above a particular income level. According to some researchers, it is challenging to distinguish between the use and emissions of natural resources and economic growth (absolute decoupling) because of the interdependence between socioeconomic conditions and their biophysical basis (Wiedenhofer et al. 2020 ; Wang and Su, 2019 ; Wu et al., 2018 ). However, a shred of increasing evidence shows that it could be possible for humans to maintain a quality of life and a decent standard of living inside the ecological frontier of the environment, given that a contemporary perspective on the production and use of materials are adopted in conjunction with more fair wealth distribution (Millward-Hopkins et al. 2020 ; Bengtsson et al., 2018 ; Ni et al., 2022 ).

The scholarly discourse and institutional framework on the relationship between happiness and economic progress are synthesised in the happiness economy (Frey and Gallus 2012 ; Sohn, 2010 ; Clark et al., 2016 ; Easterlin, 2015 ; Su et al., 2022 ). From a happiness economy perspective, extreme materialism is unsustainable as it significantly impacts natural resources and hinders social coherence and individuals psychological and physical well-being (Fioramonti et al. 2022a ). Additionally, inequalities within countries have grown, while psychological suffering has increased, especially during accelerated growth (Vicente 2020 ; Galbraith, 2009 ). The modern world is witnessing anxiety, depression, wars, reduction of empathy, climate change, pandemics, loss of social bonds and other psychological disorders (Brahmi et al., 2022 ; Santini et al., 2015 ).

It has been scientifically proven that cordial human relations, care-based activity, voluntary activities and the living environment immensely impact a person’s health and societal well-being (Bowler et al. 2010 ; Keniger et al., 2013 ). Ecological economists demonstrated that free ecosystem services have enhanced human well-being (Fang et al. 2022 ). Social epidemiologists have long argued that an increase in inequalities has a negative influence on society while providing equality tends to improve significant objective ways of well-being, from healthier communities to happier communities, declining hate and crime and enhancing social cohesion, productivity, unity and mutual trust (Aiyar and Ebeke 2020 ; Ferriss, 2010 ).

From moving beyond materialistic growth, the happiness economy promotes, appreciates, and protects the environmental, societal, and human capital contributions that lead to cummalative well-being. In a happiness economy framework, a multidimensional approach is needed to evaluate the level of development based on the environmental parameters, health outcomes, as well as public trust, hope, value-creating education and social bonds (Agrawal and Sharma 2023 ; Bayani et al. 2023 ; Lavrov, 2010 ). Such factors have consistently been excluded from any traditional concept or assessment of economic growth. As a result, countries have promoted more industrial activities that deteriorate the authentic ways of human well-being and, hence, the foundations of economic progress.

An excess of production can create a detrimental effect on climate and people’s health, thereby creating a negative externality for society (Fioramonti et al. 2022b ). Moderation of output may be more efficient and desirable than hyper/over-production, as the former can reduce negative environmental externalities (e.g. waste, climate change) and create positive externalities (e.g. employment of the local resources and community) (Kim et al. 2019 ; Kinman and Jones, 2008 ). Moreover, people can also be productive in other contexts outside of the workplace, such as as volunteers, business owners, artists, friends, or members of the community (Fioramonti et al. 2022a ).

Various scholars and scientific research have established that the essential contributions to happiness in one’s life are made by natural surroundings, green and blue spaces, eco-friendly environment, healthy social relations, spirituality, good health, responsible consumption and value-creating education (Helliwell et al. 2021 ; Francart et al., 2018 ; Armstrong et al., 2016 ; Gilead, 2016 ; Giannetti et al., 2015 ). Unfortunately, existing conventional growth theories have ignored all these significant contributions. For example, GDP considers natural ecosystems as economically helpful only up until they are mined and their products are traded (Carrero et al. 2020 ). The non-market benefits they generate, such as natural fertilization, soil regeneration, climate regulation, clean air and maintenance of biodiversity, are entirely ignored (Boyd 2007 ; Hirschauer et al., 2014). The quality time people spend with their families and communities for leisure, educating future generations and making a healthy communal harmony is regarded meaningless, even in the event that they are important to enhance people’s well-being and, hence, to assist any dimension of economic engagement (Griep et al. 2015 ; Agrawal et al., 2020 ). Similarly, if an economy is focusing on people’s healthy lifestyle (for example, by providing comfortable working hours, improving work-life balance, emphasizing mental health, focusing on healthy food, reducing pollution, and promoting sustainable consumption), it is not considered in sync with the growth paradigm (Roy 2021 ; Scrieciu et al., 2013; Shrivastava and Zsolnai 2022 ; Lauzon et al., 2023 ).

Among the latest reviews, Bayani et al. ( 2023 ) highlight that the economics of happiness helps reduce the country’s financial crime by providing a livelihood that reduces financial delinquency. Chen ( 2023 ) highlights that smart city performance enhances urban happiness by adopting green spaces, reusing and recycling products, and controlling pollution. The study by (Agrawal and Sharma 2023 ) proposed a conceptual framework for a happiness economy to achieve sustainability by going beyond GDP. Similarly, Fioramonti et al. ( 2019b ) explored going beyond GDP for a transition towards a happy and well-being economy. The article by Laurent et al. ( 2022 ) has intensively reviewed the well-being indicators in Rome and proposed a conceptual framework for it.

Table  1 provides a thorough summary of the prior review studies about the happiness economy and its contribution to public policy and sustainable development.

3 Research methodology

In the current study, we have adopted an integrative review approach of SLR and bibliometric analysis of the academic literature to get a detailed knowledge of the study, which could also help propose future research avenues. The existing scientific production’s qualitative and quantitative context must be incorporated for a conclusive decision. The study by Meredith ( 1993 ) defines that SLR enables an “integrating several different works on the same topic, summarising the common elements, contrasting the differences, and extending the work in some fashion”. In the present study, the “Preferred Reporting Items for Systematic Reviews and Meta-Analyses” (PRISMA) is applied to perform the SLR to follow systematic and transparent steps for the research methodology, as shown in Fig.  1 . The PRISMA technique includes the identification, screening, eligibility, and exclusion criteria parts of the review process.

Additionally, examples of the data abstraction and analysis processes are provided (Mengist et al. 2020 ; Moher et al., 2015 ). The four main phases of the PRISMA process are eligibility, identification, screening, and data abstraction and analysis. Because the PRISMA technique employs sequential steps to accomplish the study’s purpose, it benefits SLR research. Moreover, the bibliometric analysis helps summarise the existing literature’s bibliographic data and determine the emerging condition of the intellectual structure and developing tendencies in the specified research domain (Dervis 2019 ).

3.1 Identification

The step to conduct the PRISMA is the identification of the relevant keywords to initiate the search for material. Next, search strings for the digital library’s search services are created using the selected keywords. The basic search query is for digital library article titles, keywords, and abstracts. Next, a Boolean AND or OR operator is used to generate the search string (Boolean combinations of the operators may also be used).

There are different search databases to conduct the review studies, such as Scopus, Sage, Web of Science, IEEE, and Google Scholar. Among all the available search databases, we have used the Scopus database to identify the articles; since 84% of the material on Web of Science (WoS) overlaps with Scopus, very few authors have addressed the benefits of adopting Scopus over WoS (Mongeon and Paul-Hus 2016 ). Scopus is widely used by academicians and researchers for quantitative analysis (Donthu et al. 2021 ). It is the biggest database of scientific research and contains citations and abstracts from peer-reviewed publications consisting of journal research articles, books and conference articles (Farooque et al., 2019 ; Dhayal et al., 2022 ; Brahmi et al., 2022 ). The following search term was used: (TITLE-ABS-KEY (“happiness economy” OR “economics of happiness” OR “happiness in economy” OR “economy of happiness” OR “economy of wellbeing” OR “wellbeing economy” OR “wellbeing in economy” OR “beyond growth”). This process yields 380 artciles in the initial phase.

3.2 Screening

The second phase is completed by all identified articles from the Scopus database obtained from the search string in the identification phase. The publications are either included or excluded throughout the screening process based on the standards established by the authors and with the aid of particular databases. Exclusion and inclusion criteria are shown during the screening phase to identify pertinent articles for the systematic review procedure. The timeline of this study’s selected articles is from 1995 to 2023. The first article related to the research domain was published in 1995. The second criterion for the inclusion includes the types of documents. In the present research, the authors have regarded only peer-reviewed journals and review articles. Other types of articles, such as books, book chapters, conference articles, notes, and editorials, are excluded to maintain the quality of the review. The third inclusion and exclusion criterion is based on language. All the non-English language documents are excluded to avoid translation confusion; hence, only the English language articles are considered for the final review. After the screening process, 297 articles are obtained.

3.3 Eligibility

Articles are manually selected or excluded depending on specific criteria specified by the authors during the eligibility process. During the elimination process, the authors excluded the articles that did not fit into the scope of review after manual screening of the articles. Two hundred fifty-seven articles were selected after the eligibility procedure. These selected articles are carefully reviewed for the study by reviewing the titles, abstracts, and standards from earlier screening processes.

3.4 Data abstraction and analysis

Analysis and abstraction of data are part of the fourth step. Finally, 257 papers were taken into account for final review. After that, the studies are culled to identify pertinent themes and subthemes for the current investigation by thoroughly reviewing each article’s text. An integrative review is a form of study that combines mixed, qualitative, and quantitative research procedures. It is carried out as shown in Fig.  1 . R-studio Bibliometrix and VOSviewer version 1.6.18 were used to evaluate the final study dataset corpus of 257 articles. Since the Bibliometrix software package is a free-source tool programmed in the R language. It is proficient of conducting comprehensive scientific mapping. It also contains several graphical and statistical features with flexible and frequent updates (Agrawal et al. 2023a , b ).

Extraction of articles and selection process

This section provides an answer to the first research question, RQ1, by indicating the main information of corpus data, research publication trends, influential prolific authors, journals, countries and most used keywords, etc. (Refer to Tables  2 , 3 and 4 ) and (Refer to Figs.  2 , 3 , 4 , 5 and 6 ).

4.1 Bibliometric analysis

Table  2 shows the relevant information gathered from the publication-related details. It presents the cognitive knowledge of the research area, for instance, details about authors, annual average publication, average citations and collaboration index. By observing the rate of document publishing, the study illustrates how much has already been done and how much remains to be investigated.

The annual publication trend is shown in Fig.  2 . It is reflected that the first article related to happiness in an economy was released in the year 1995 when (Bowling 1995 ) published the article “What things are important in people’s lives? A survey of the public’s judgements to inform scales of health related quality of life” where the article discussed “quality of life” and “happiness” as an essential component of a healthy life. Oswald ( 1997 ) brought the concept of happiness and economics together and raised questions such as “Does money buy happiness?” or “Do you think your children’s lives will be better than your own?”. Eventually, the gross national product of the past year and the coming year’s exchange rate was no longer the concern; instead, happiness as the sublime moment became more accurate (Schyns 1998 ; Easterlin, 2001; Frey and Stutzer, 2005 ). Post-2013, we can see exponential growth in the publication trend, and the reason behind the growth is the report published by the “ Stiglitz-Sen-Fitoussi” Commission, which has identified limitations of GDP and questioned the metric of wealth, economic and societal progress. The affirmed questions have gained the attention of researchers and organizations, and thus, they have explored the alternatives to GDP. As a result, the “Organization for Economic Co-operation and Development” (OECD) have proposed a wellbeing framework. Some research work has significantly impacted that time, contributing to the immense growth in this research area (Sangha et al. 2015 ; Spruk and Kešeljević, 2015 ; Nunes et al., 2016 ).

Publication trend

Table  3 shows the top prolific journals concerning the topmost publications in the domain of happiness economy for the corpus of 257 articles, namely “International Journal of Environmental Research and Public Health”, “Ecological Economics”, “Ecological Indicators”, “Sustainability” and “Journal of Cleaner Production” with 5, 4, 4,4 and 4 articles respectively (Refer to Table  4 ). Moreover, the most influential journals with maximum citations are “Nature Human Behavior”, “Quality of Life Research”, “Journal of Applied Behavior Analysis”, “Journal of Cleaner Production” and “Ecological Economics”, with 219, 205, 186, 154 and 142 citations, respectively. “Journal of Cleaner Production” and “Ecological Economics” are highly prolific and the most influential journals in the happiness economy research domain.

Table  4 shows the most influential authors. Baños, R.M. and Botella, C. are the two most contributing authors with maximum publications. For the maximum number of citations, Zheng G. and Coscieme L. are the topmost authors for their research work. The nations were sorted according to the quantity of publications, and Fig.  3 showed where the top ten countries with the highest number of publications are listed originated. It can be seen from the figure that the United Stated has contributed the maximum publications, 66, followed by the United Kingdom with 41 articles, followed by Germany with 32 articles. It is worth noting that emerging nation such as India and China have also made significant contributions.

Top ten contributing countries

Figure  4 shows semantic network analysis in which the relationships between words in individual texts are performed. In the present study, we have identified word frequency distributions and the co-occurrences of the authors’ keywords in this study. We employed co-word analysis to find repeated keywords or terms in the title, abstract, or body of a text. In Fig.  5 , the circle’s colour represents a particular cluster, and the circle’s radius indicates how frequently the words occur. The size of a keyword’s node indicates how frequently that keyword appears. The arcs connecting the nodes represent their co-occurrence in the same publication. The greater the distance between two nodes, the more often the two terms co-occur. It can be seen that “happiness” is linked with “growth” and “life satisfaction”. The nodes of “green economy”, “ecological economics”, and “climate change” are in a separate cluster that shows they are emerging areas, and future studies can explore the relationship between happiness economy with these keywords.

Co-ocurrance of author’s keyword (Author’s compilation)

4.2 Thematic map analysis through R studio

The thematic analysis map, as shown in Fig.  5 , displays, beneath the author’s keywords, the visualisation of four distinct topic typologies produced via a biblioshiny interface. The thematic map shows nine themes/clusters under four quadrants segregated in “Callon’s centrality” and “density value”. The degree of interconnectedness between networks is determined by Callon’s centrality, while Callon’s density determines the internal strength of networks. (Chen et al. 2019 ). The rectangular boxes in Fig.  5 represent the subthemes under each topic or cluster that are either directly or indirectly connected to the major themes, based on the available research. In the upper-right quadrant, four themes have appeared, namely “circular economy”, “well-being economy”, “depression”, and “sustainable development”, they fall under the category of motor themes since they are extremely pertinent to the research field, highly repetitious, and well-developed. When compared to other issues with internal linkages but few exterior relations, “urban population” in the upper-left quadrant is seen as a niche concern since it is not as significant. This cluster may have affected the urban population’s happiness (Knickel et al. 2021 ). “Social innovation” is categorised as an emerging or declining subject with low centrality and density, meaning it is peripheral and undeveloped. It is positioned in the lower-left quadrant. Last but not least, the transversal and fundamental themes “happiness economy”, “subjective well-being”, and “climate change” in the lower-right quadrant are seen to be crucial to the happiness economy study field but are still in the early stages of development. As a result, future research must place greater emphasis on the quantitative and qualitative growth of the study area in light of the key themes that have been identified.

Thematic map analysis

4.3 Science mapping through cluster analysis

In the study, science mapping was conducted to examine the interrelationship between the research domains that could be intellectual (Aria and Cuccurullo 2017 ; Donthu et al. 2021 ). It includes various techniques, such as co-authorship analysis, co-occurrence analysis, bibliographic coupling, etc. We have used R-Studio for the study’s temporal analysis by cluster analysis. To answer RQ2, the authors have performed a qualitative examination of the emerging cluster themes through the science mapping of the existing research corpus of 257 articles by performing bibliographic coupling of documents. Bibliographic coupling analysis helps identify clusters reflecting the most recent research themes in the happiness economy field to illuminate the field’s current areas of interest.

The visual presentation of science mapping relied on VoSviewer version 1.6.18 (refer to Fig.  6 ). Five significant clusters emerged in this research domain (refer to Table  5 ). Going beyond GDP: Transition towards happiness economy, rethinking growth for sustainability and ecological regeneration, beyond money and happiness policy, health, human capital and wellbeing and Policy-Push for happiness economy. A thorough examination identified cluster analyzes has also assists us in identifying potential future research proposals. (Franceschet 2009 )

4.4 Cluster 1: Going beyond GDP: transition towards happiness economy

It depicts from the green colour circles and nodes, where seven research articles were identified with a common theme of beyond GDP that can be seen in Fig.  6 . Cook and Davíðsdóttir ( 2021 ) investigated the linkages between the alternative measure of the beyond growth approach such as a well-being economy prespective and the SDGs. They proposed a conceptual model of a well-being economy consisting of four capital assets interrelated with SDGs that promote well-being goals and domains. To extend the concept of going beyond GDP, various economic well-being indicators are being aligned with the different economic, environmental, and social dimensions to target the set goals of SDG. It is found that the “Genuine Progress Indicator” (GPI) is consider as the most extensive method that covers the fourteen targets among the seventeen’s SDG’s. Cook et al. ( 2022 ) consider SDGs to represent the classical, neoclassical and growth-based economy model and as an emerging paradigm for a well-being economy. The significance of GDP is more recognized within the goals of sustainable development.

GPI is considered an alternative indicator of economic well-being. On this basis, excess consumption of high-quality energy will expand macro-economic activity, which GDP measures. For such, a conceptual exploration of the study is conducted on how pursuing “Sustainable Energy Development” (SED) that can increase the GPI results. As the study’s outcome, according to the GPI, SED will have a significant advantage in implementing energy and environment policy and will also contribute to the advancement of social and economic well-being. Coscieme et al. ( 2020a ) explored the connection between the unconditional growth of GDP and SDG. The author considered that policy coherence for sustainable development should lessen the damaging effects of cyclic manufacturing on the ecosystem. Thus, the services considered free of charge in the GDP model should be valued as a component of society. Generally, such services include ecosystem services and a myriad of “economic” functions like rainfall and carbon sequestration. To work for SDG 8, defined by the “United Nations Sustainable Development Goals” (UNSDGs), a higher GDP growth rate would eventually make it more difficult to achieve environmental targets and lessen inequality. Various guidelines were proposed to select alternative variables for SDG-8 to enhance coherence among all the SDG and other policies for sustainability.

Fioramonti et al. ( 2019a ) state their focus is to go beyond GDP toward a well-being economy rather than material output with the help of convergence reforms in policies and economic shifts. To achieve the SDG through protecting the environment, promoting equality, equitable development and sharing economy. The authors have developed the Sustainable Well-Being Index (SWBI) to consolidate the “Beyond GDP” streams as a metric of well-being matched with the objectives to achieve SDG. The indicators of well-being for an economy have enough possibility to connect current transformations in the economic policies and the economy that, generally, GDP is unable to capture.

Fioramonti et al. ( 2022a ) investigate the critical features of the Wellbeing Economy (WE), including its various parameters like work, technology, and productivity. Posting a WE framework that works for mainstream post-growth policy at the national and international levels was the study’s primary goal. The authors have focused on building a society that promotes well-being that should be empowering, adaptable, and integrative. A well-being economic model should develop new tools and indicators to monitor all ecological and human well-being contributors. A multidimensional approach including critical components for a well-being economy was proposed that creates value to re-focus on economic, societal, personal, and natural aspects. Rubio-Mozos et al. ( 2019 ) conducted in-depth interviews with Fourth Sector business leaders, entrepreneurs, and academicians to investigate the function of small and medium-sized businesses and the pressing need to update the economic model using a new measure in line with UN2030. They have proposed a network from “limits to growth” to a “sustainable well-being economy”.

4.5 Cluster 2: Rethinking growth for sustainability and ecological regeneration

Figure  6 depicts it from blue circles and nodes, wherein four papers were identified. Knickel et al. ( 2021 ) proposed an analytical approach by collecting the data from 11 European areas to examine the existing conditions, difficulties, and anticipated routes forward. The goal of the study is to define the many ideas of a sustainable well-being economy and territorial development plans that adhere to the fundamental characteristics of a well-being economy. A transition from a conventional economic viewpoint to a broader view of sustainable well-being is centred on regional development plans and shifting rural-urban interactions.

Pillay ( 2020 ) investigates the new theories of de-growth, ecosocialism, well-being and happiness economy to break the barriers of traditional economic debates by investigating ways to commercialise and subjugate the state to a society in line with non-human nature. The significant indicator of Gross National Happiness (GNH) is an alternative working indicator of development; thus, the Chinese wall between Buddha and Marx has been built. They questioned the perspective of Buddha and Marx, whether they were harmonized or became a counter-hegemonic movement. In order to determine if the happiness principle is grounded in spiritual values and aligns with the counter-hegemonic ecosocialist movement, the author examined the ecosocialist perspective. Shrivastava and Zsolnai ( 2022 ) have investigated the theoretical and practical ramifications of creative organisations for well-being rooted in the drive for a well-being economy. Wellbeing and happiness-focused economic frameworks are emerging primarily in developed countries. This new policy framework also abolishes GDP-based economic growth and prioritizes individual well-being and ecological regeneration. To understand its application and interpretation, Van Niekerk ( 2019 ) develops a conceptual framework and theoretical analysis of inclusive economics. It contributes to developing a new paradigm for economic growth, both theoretically and practically.

4.6 Cluster 3: ‘Beyond money’ and happiness policy

It depicts pink circles and nodes, wherein five articles were identified, as shown in Fig.  6 . According to Diener and Seligman ( 2004a ) economic indicators are critical in the early phases of economic growth when meeting basic requirements is the primary focus. However, as society becomes wealthier, an individual’s well-being becomes less dependent on money and more on social interactions and job satisfaction. Individuals reporting high well-being outperform those reporting low well-being in terms of income and performance. A national well-being index is required to evaluate well-being variables and shape policies systematically. Diener and Seligman ( 2018 ) propounded the ‘Beyond Money’ concept in 2004. In response to the shortcomings of GDP and economic measures, other quality-of-life indicators, such as health and education, have been created. The national account of well-being has been proposed as a common path to provide societies with an overall quality of life metric. While measuring the subjective well-being of people, the authors reasoned a societal indicator of the quality of life. In this article, the authors have proposed an economy of well-being model by combining subjective and objective measures to convince policymakers and academicians to enact policies that enhance human welfare. The well-being economy includes quality of life indicators and life satisfaction, subjective well-being and happiness.

Frey and Stutzer ( 2000 ) perceived the microeconomic well-being variables in countries. In the study, survey data was used from 6000 individuals in Switzerland and showed that the individuals are happier in developed democracies and institutions (government federalization). They analyzed the reported subjective well-being data to determine the function of federal and democratic institutions on an individual’s satisfaction with life. The study found a negative relationship between income and unemployment. Three criteria have been employed in the study to determine happiness: demographic and psychological traits, macro- and microeconomic factors, and constitutional circumstances. Thus, a new pair of determinants reflects happiness’s effect on individuals’ income, unemployment, inflation and income growth.

Happiness policy, according to Frey and Gallus ( 2013b ), is an intrinsic aspect of the democratic process in which various opinions are collected and examined. “Happiness policy” is far more critical than continuing a goal such as increasing national income and instead considered an official policy goal. The article focuses on how politicians behave differently when they believe that achieving happiness is the primary objective of policy. Frey et al. ( 2014 ) explored the three critical areas of happiness, which are positive and negative shocks on happiness, choice of comparison and its extent to derive the theoretical propositions that can be investigated in future research. It discussed the areas where a more novel and comprehensive theoretical framework is needed: comparison, adaptation, and happiness policy. Wolfgramm et al. ( 2020 ) derived a value-driven transformation framework in Māori economics of wellbeing. It contributes to a multilevel and comprehensive review of Māori economics and well-being. The framework is adopted to advance the policies and implement economies of well-being.

4.7 Cluster 4: Health, human capital and wellbeing

It is depicted as a red colour circle and nodes in Fig.  6 , and only three papers on empirical investigations were found. Laurent et al. ( 2022 ) investigated the Health-Environment Nexus report published by the “Wellbeing Economy Alliance”. In place of increased production and consumption, they suggested a comprehensive framework for human health and the environment that includes six essential paths. The six key pathways are well-being energy, sustainable food, health care, education, social cooperation and health-environment nexus. The proposed variables yield the co-benefits for the climate, health and sustainable economy. Steer clear of the false perception of trade-offs, such as balancing the economy against the environment or the need to save lives. McKinnon and Kennedy ( 2021 ) focuses on community economics of well-being that benefits entrepreneurs and employees. They investigated the interactions of four social enterprises that work for their employees inside and within the broader community. Cylus et al. ( 2020 ) proposed the opportunities and challenges in adopting the model of happiness or well-being in an economy as an alternative measure of GDP. Orekhov et al. ( 2020 ) proposed the derivation of happiness from the World Happiness Index (WHI) data to estimate the regression model for developed countries.

4.8 Cluster 5: Policy-push for happiness economy

It is depicted as an orange circle and nodes in Fig.  6 , and only five papers on empirical and review investigations were found. Oehler-Șincai et al. ( 2023 ) proposed the conceptual and practical perspective of household-income-labour dynamics for policy formulation. It discusses the measurement of well-being as a representation of various policies focusing on health, productivity, and longevity. It focuses on the role of policy in building the subjective and objective dimensions of well-being, defines the correlation between well-being, employment policies, and governance, is inclined to the well-being performance of various countries, and underscores present risks that jeopardize well-being. Musa et al. ( 2018 ) have developed a “community happiness index” by incorporating the four aspects of sustainability—economic, social, environmental, and urban governance—as well as the other sustainability domains, such as human well-being and eco-environmental well-being. From then onwards, community happiness and sustainable urban development emerged. Chernyahivska et al. ( 2020 ) developed strategies to raise the standard of living for people in countries undergoing economic transition by using the quality of life index. The methods uncovered are enhancing employment opportunities and uplifting the international labour market in urban and rural areas, prioritizing human capital, eliminating gender inequality, focusing on improving the individual’s health, and enhancing social protection. Zheng et al. ( 2019 ) investigated the livelihood and well-being index of the population that makes liveable conditions and city construction in society based on people’s happiness index. The structure of a liveable city should be emphasised on sustainable development. The growth strategy in urban areas is an essential aspect of building a liveable city. Frey and Gallus ( 2013a ) criticised the National Happiness Index as a policy goal in a country because it cannot be measured and thus fails to measure the true happiness of people. To measure real happiness, the government should establish living conditions that enable individuals to become happy. The rule of law and human rights must support the process.

The structure of a liveable city should be emphasized in sustainable development. The growth strategy in urban areas is an essential aspect of building a liveable city. Frey and Gallus ( 2013a ) criticized the National Happiness Index as a policy goal in a country because it cannot be measured and thus fails to identify the true individuals happiness. To measure real happiness, the government should establish living conditions that enable individuals to be happy. The process needs to be supported by human rights and the rule of law.

Visualization of cluster analysis

5 Discussion of findings

Concerns like the improved quality-of-life and a decent standard of living within the ecological frontier of the environment have various effects on individuals overall well-being and life satisfaction. The ‘beyond growth’ approach empathized with the revised concept of growth, which is based on the idea of maximising happiness for a larger number of people rather than being driven by a desire for financial wealth or production. In that aspect, the notion of happiness economy is designed that prioritizes serving both people and the environment over the other. This present article has focused on the beyond growth approach and towards a new economic paradigm by doing bibliometric and visual analysis on the dataset that was obtained from Scopus, helping to determine which nations, publications, and authors were most significant in this field of study.

In this field of study, developed nations have made significant contributions as compared to the developing nations. In total, 59 countries have made the substantial contribution to the beyond growth approach literature an some of them have proposed their respective national well-being economy framwework. Among 59 countries the United States and the United Kingdom have been crucial to the publishing. With the exception of five of the top 10 nations, Europe contributes the most to scientific research. The existing research shows the inclination of developed and developing countries to build a new economic paradigm that goes beyond growth by prioritizing the happiness level at individual as well as at collective level.

The most prolific journals in this research domain are the “International Journal of Environmental Research” and “Public Health” with the total publication of 5 and 4. The top two cited journals were the “ Nature Human Behavior” with 219 citations and the “Quality of Life Research” with 205 citations. Due to various economic and non-economic factors, these journals struggled to strike a balance between scientific accuracy and timeliness, and it became vital to spread accurate and logical knowledge. For, example, discussing the relationship between inequality and well-being, exploring the challenges and opportunites of happiness economy in different countries, assessing the role of health in all policies to support the transition to the well-being economy. Visualization of semantic network analysis of co-ocurrance of authors keywords from the VOSviewer showed the future research scope to explore the association between happiness economy along with green economy, climate change, spirituality and sustainability. However, in the thematic mapping, the motor themes denotes the themes that are well-developed and repetative in research, such as, well-being economy, depression, sustainable development and circular economy. The basic themes depicts the developing and transveral themes such as happiness economy, subjective well-being and climate condition. As a result, future research must place greater emphasis on the theoretical and practical expansion of the research field in view of the determined major subjects.

The present study have performed the cluster analysis to identify the emerging research themes in this domain through VOSviewer that helps to analyze the network of published documents. Based on published papers, the author can analyse the interconnected network structure with the use of cluster analysis. We have identified the top five clusters from the study. Each cluster denote the specific and defined theme of the research in this domain. In cluster 1, the majorly of the authors are working in the area of going beyond GDP and transition towards happiness economy, which consists of empirical and review studies. Cluster 2 represents that authors are exploring the relationship between rethinking growth for sustainability and ecological regeneration to evaluate the transition from a conventional economic thought to a broader view of sustainable well-being which is centred on regional development plans and shifting rural-urban interactions. In cluster 3, the authors are exploring the beyond money and happiness policy themes and identified the shortcomings of GDP and economic measures, other quality-of-life indicators, such as health and education. They have proposed the well-being index to evaluate the well-being variables and shape socio-economic policies systematically. The authors have proposed an economy of well-being model by combining subjective and objective measures to convince policymakers and academicians to enact policies that enhance human welfare. The well-being economy includes quality of life indicators and life satisfaction, subjective well-being and happiness. In cluster 4, the authors are working of related theme of Health, human capital and wellbeing, whereby they have put up a comprehensive framework for health and the environment that includes several important avenues for prioritising human and ecological well-being over increased production and consumption. In cluster 5, the authors have suggested the policy-push for happiness economy in which they have identified the conceptual and practical perspective of household-income-labour dynamics for policy formulation. Majorly of the authors in this clutster have focused on the role of policy in building the subjective and objective dimensions of well-being, defines the correlation between well-being, employment policies, and governance, is inclined to the well-being performance of various countries, and underscores present risks that jeopardize well-being. Hence, the present study will give academics, researchers, and policymakers a thorough understanding of the productivity, features, key factors, and research outcomes in this field of study.

6 Scope for future research avenues

The emergence of a happiness economy will transform society’s traditional welfare measure. Such changes will generate more reliable and practical means to measure the well-being or welfare of an economy. After a rigorous analysis of the existing literature, we have proposed the scope for future research in Table  6 .

7 Conclusion

In 2015, the United Nations proposed the pathbreaking and ambitious seventeen “Sustainable Development Goals” (SDGs) for countries to steer their policies toward achieving them by 2030. In reality, economic growth remains central to the agenda for SDGs, demonstrating the absence of a ground-breaking and inspirational vision that might genuinely place people and their happiness at the core of a new paradigm for development. As this research has reflect, there are various evidence that the happiness economy strategy is well-suited to permeate policies geared towards sustainable development. In this context, ‘happiness’ may be a strong concept that ensures the post-2030 growth will resonate with the socioeconomic and environmental traits of everyone around the world while motivating public policies for happiness.

The current research has emphasized the many dynamics of the happiness economy by using a bibliometric analytic study of 257 articles. We have concluded that the happiness economy is an emerging area that includes different dimensions of happiness, such as ecological regeneration, circular economy, sustainability, sustainable well-being, economic well-being, subjective well-being, and well-being economy. In addition to taking into consideration the advantages and disadvantages of human participation in the market, a happiness-based economic system would offer new metrics to assess all contributions to human and planetary well-being. In terms of theoretical ramifications, we suggest that future scholars concentrate on fusing the welfare and happiness theory with economic policy. As countries are predisposed to generate disharmony and imbalance, maximizing societal well-being now entails expanding sustainable development. Since the happiness economy is still a relatively novel field, it offers numerous potential research opportunities.

8 Limitations

Similar to every other research, this one has significant restrictions as well. We are primarily concerned that all our data were extracted from the Scopus database. Furthermore, future research can utilize other software like BibExcel and Gephi to expound novel variables and linkages. Given the research limitations, this article still provides insightful and relevant direction to policymakers, scholars, and those intrigued by the idea of happiness and well-being in mainstream economics.

The study offers scope for future research in connecting the happiness economy framework with different SDGs. Future studies can also carry empirical research towards creating a universally acceptable ‘happiness economy index’ with human and planetary well-being at its core.

Data availability

Data not used in this article.

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All authors contributed to the study conception and design. Shruti Agrawal: Conceptualization, Material preparation, Data Collection, Formal analysis, Methodology, Writing - Original Draft, Review and Editing. Nidhi Sharma: Validation, Project Administration, Supervision, and Writing - Review & Editing. Karambir Singh Dhayal: Validation, Formal analysis, Methodology, Writing - Review and Editing. Luca Esposito: Validation, Writing - Review and Editing. The first draft of the manuscript was written by Shruti Agrawal and all authors commented on previous versions of the manuscript. All authors read and approved the final manuscript

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Agrawal, S., Sharma, N., Dhayal, K.S. et al. From economic wealth to well-being: exploring the importance of happiness economy for sustainable development through systematic literature review. Qual Quant (2024). https://doi.org/10.1007/s11135-024-01892-z

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