Green growth path dependence momentum under the prism of COP26: the role of financial deepening, ICT development, and export diversification.

Abstract

Financial deepening is important in resource allocation for more productive enterprises, leading to sustainable green growth. Moreover, rapid development in the digital economy and export diversification significantly affect green growth. From this perspective, our study explores the impact of financial deepening, ICT development, and export diversification on green growth in China's economies from 1996 to 2021. The study explores the linkage between financial deepening, ICT development, export diversification, and green growth by employing the nonlinear autoregressive distributed lag (NARDL) approach. The results obtained in the long run are as follows: positive shock in financial deepening brings positive change in green growth, whereas negative shock in financial deepening reduces green growth. In the long run, positive shock in ICT enhances green growth, but negative shock in ICT does not impact green growth. Moreover, positive shock in export diversification brings positive change in green growth, whereas negative shock in export diversification reports an insignificant impact on green growth. Based on findings, it is suggested that financial deepening, ICT development, and export diversification are conducive to sustainable green growth.