Impact of Smart Economy on Smart Areas and Mediation Effect of National Economy

The smart city presupposes the integration of different parts-Smart Economy, Smart Environment, Smart People, Smart Living, Smart Mobility, and Smart Governance. The integration assumes the certain relations between them. There are researches considering the impact of separate economic indicators on specific smart area or solutions. Nevertheless, the authors have not come across any studies considering the mutual impact of these areas. The goal of the research is to determine the direct effects of smart economy on other smart components and the indirect (mediation) impact of general indicators of national economy on smart domains. The model was estimated using the PLS-SEM technique tested in SmartPLS-3.3.7. software. The sample included statistical data on the indicators, received from Eurostat Database and Latvian Statistical Office. Data referred to Latvia for years 2009-2019. As a result, the hypotheses that Smart Economy has direct impact on smart people, smart living, smart mobility, smart environment, and smart society were supported. The mediation effect of general indicators of national economy was confirmed only for the smart society domain; other hypotheses were rejected. The obtained results can be practically applied by the authorities responsible for sustainable development of smart areas. The results of mediation effect can be especially interesting for countries that do not present a very high level of economic development but are developing smart, sustainable cities.