On the Determinants of Green Technology Diffusion: An Empirical Analysis of Economic, Social, Political, and Environmental Factors

Busra Agan,Mehmet Balcilar

doi:10.3390/su14042008

Abstract

The purpose of this study is to investigate the importance of economic, social, political, and environmental factors in determining green technology diffusion. We use a unique annual panel dataset covering 58 nations from 1990 to 2019. Based on dynamic panel data models estimated using system generalized method of moments (GMM), we test whether the technological achievement of nations, general technology diffusion trends, environmental performance, democratic accountability, income distribution, foreign direct investment, income level, and socioeconomic conditions are significant determinants. Our findings indicate that green technology diffusion has a significant relationship with all of these factors. We obtain new evidence that general or brown technological innovation, diffusion, and achievement trends in a country are significant drivers of environmental technology diffusion. The findings of our paper have significant implications for sustainable development, given the importance of green products and technologies. The results of the study suggest that policies aimed at promoting the diffusion of green technologies may not be successful in the presence of unfavorable economic, social, political, or environmental conditions.

Highlights

The benefits of the creation of technology and technology diffusion in climate change mitigation have been greatly emphasized in recent policy debates in academia and policy making institutions (e.g., [1–4])
We extend previous research by incorporating a broad range of factors that may influence the diffusion of green technologies, including democratic accountability, per capita income, education, socioeconomic status, foreign direct investment, CO2 emission, and environmental performance
The main objective of this paper is to identify the major economic, social, political, social, and environmental determinants of green technology diffusion

Summary

Introduction

The benefits of the creation of technology and technology diffusion in climate change mitigation have been greatly emphasized in recent policy debates in academia and policy making institutions (e.g., [1–4]). The achievement of environmental goals for sustainable development, as well as the minimization of their costs, are contingent on the development and diffusion of innovative, environmentally friendly technology. Market failures in terms of technological development are conceptually distinct from environmental externalities, implying that the deployment of new, ecologically beneficial technology suffers from a “double externality,” making it a significant topic of interest for researchers and policy makers. The creation of green technologies plays a key role in climate change mitigation and sustainable development, these technologies may not be adopted widely and their benefits may not be realized. New technologies become beneficial only when they are widely adopted, which is governed by the process of technology diffusion.

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Conclusion