The effect of green economic growth on the foreign investment behaviour of heterogeneous enterprises

PurposeThe development of green economy is of academic and policy importance to governments and policymakers worldwide. In the light of the necessity of renewable energy to sustain green economic growth, this study aims to examine the relationship between renewable energy consumption and green economic growth, controlling for the impact of trade openness for Organization for Economic Co-operation and Development countries over the period 1990-2015, within a multivariate panel data framework.Design/methodology/approachTo investigate the long-run relationship between variables, panel cointegration tests are performed. Panel Granger causality based on vector error correction models is adopted to understand the short- and long-run dynamics of the data. Furthermore, ordinary least square (OLS), dynamic OLS and fully modified OLS methods are used to confirm the long-run elasticity of green growth for renewable energy consumption and trade openness. Moreover, system generalized method of moment is applied to eliminate serial correlation, heteroscedasticity and endogeneity problems. The authors used the panel Granger causality test developed by Dumitrescu and Hurlin (2012) to infer the directionality of the causal relationship, allowing for both the cross-sectional dependence and heterogeneity.FindingsThe results suggest that renewable energy consumption and trade openness exert positive effects on green economic growth. The results of long-run estimates of green economic growth reveal that the long-run elasticity of green economic growth for trade openness is much greater than for renewable energy consumption. The estimated results of the Dumitrescu and Hurlin (2012) test reveal bidirectional causality between green economic growth and renewable energy consumption, providing support for the feedback hypothesis.Practical implicationsThis paper provides strong evidence of the contribution of renewable energy consumption on green economy for a wide range of countries. Despite the costs of establishing renewable energy facilities, it is evident that these facilities contribute to the green growth of an economy. Governments and public authorities should promote the consumption of renewable energy and should have a support policy to promote an active renewable energy market. Furthermore, the regulators must constitute an efficient regulatory framework to favor the renewable energy consumption.Social implicationsMany countries focus on increasing their GDP without taking the environmental impacts of the growth process into account. This paper shows that renewable energy consumption points to the fact that countries can still increase their economic growth with minimal damage to environment. Despite the costs of adopting renewable energy technologies, there is still room for economic growth.Originality/valueThis paper provides evidence on the contribution of renewable energy consumption on green economic growth for a wide range of countries. The paper focuses on the impact of renewable energy on economic growth by taking environmental degradation into consideration on a wide scale of countries.

Not only has artificial intelligence changed the production methods of traditional industries; it has also presented a great opportunity for future industrial development to decouple from environmental degradation and the promotion of green economic growth. The article studies the influence of artificial intelligence on green economic growth and its mechanism. The research shows that (1) artificial intelligence can promote green economic growth in China. After accounting for spatial factors, it was found that artificial intelligence could promote local green economic growth, but had a siphon effect on neighboring green economic growth. From the perspective of dynamic effects, in the short term, artificial intelligence will not significantly dampen green economic growth in neighboring regions. In the long run, artificial intelligence will have a stronger role in promoting green economic growth, and the siphon effect on neighboring cities will be more significant. (2) As the level of human capital increases, the negative spillover effect of artificial intelligence will be significantly weakened. The promotion effect of artificial intelligence on green economic growth is relatively weak in resource-based cities. (3) Artificial intelligence has obvious attenuation characteristics on the spatial spillover effect of green economic growth, but significant influence is limited to within 200km. (4) Artificial intelligence has the greatest impact on productivity, accounting for 30.59% in promoting green economic growth. The green innovation effect was 0.0181, accounting for 5.64%. The resource allocation effect is 0.0011, accounting for 3.44%. This paper provides policy enlightenment for promoting industrial intelligence and green economic growth.

Measuring the green economic growth in China: Influencing factors and policy perspectives

How do Economic Openness and R&D Investment Affect Green Economic Growth?—Evidence from China

Is resource abundance a curse for green economic growth? Evidence from developing countries

Purpose This study aims to fill the research gap related to green economic growth in the Organization of Islamic Cooperation (OIC) countries by validating the environmental Kuznets curve (EKC) theory through the role of fiscal policy, the use of natural resources, sukuk and Islamic banking, as well as the interaction of institutional quality on green economic growth. Design/methodology/approach Using first-difference generalized method of moments dynamic panel data and fully modified ordinary least squares on 17 selected OIC countries with data obtained from the World Bank, SESRIC, IIFM and WGI during 2014–2023. Findings The study found that fiscal policy has a significant negative impact on green economic growth in the short term, especially in low-income countries. Meanwhile, the use of natural resources has a positive and significant effect overall, both in the short- and long term. In high-income countries, the use of natural resources suppresses green economic growth. Sukuk and Sharia financing have a positive but not significant impact on short-term green economic growth, but they become essential in the long term. Sukuk is more effective in developed economies, while Islamic bank financing has a negative impact in weak economies. Furthermore, the role of institutional quality moderation mitigates the adverse effects of fiscal policy and strengthens natural resource management, although it remains limited to low-income countries. This finding confirms the existence of an Inverted U-shaped relationship in the context of EKC. Research limitations/implications This research highlights the need for more environmentally friendly fiscal policies, efficient natural resource management and the development of sukuk and Sharia financing to support sustainable projects in OIC countries. In addition, improving the quality of institutions is needed to strengthen governance and regulations that encourage green economic growth and more effective economic diversification. Originality/value To the best of the authors’ knowledge, this research is the first to explore the growth of the green economy in OIC countries, comprehensively integrated with the role of government policies, natural resources, Islamic finance and institutional quality.

This study examines the effect of environment tax and renewable energy transition on the green economic growth of 37 OECD countries from 1990 to 2021. The empirical results show that environmental tax has a non-linear impact on green economic growth. The nonlinearity is characterised by a U-shape relationship, indicating that at the initial stage, environmental taxes negatively impact green growth. The impact then becomes positive and significant at a later stage when environment tax reaches a threshold of 3.53 % for production-based green growth and 2.46 % for demand-based green growth. By replacing fossil fuels in electricity generation, heating, transportation, and industrial processes, the study finds that transitions to renewable energy improve air pollution and the green economy. The estimated results are reassuringly robust to alternative measures of green economic growth (production-based and demand-based Co2 productivity) and various estimators such as instrumental regression, fixed effect instrumental regression, Machado and Silva quantile regression and JKS Granger non-causality results. The study recommends that since environmental taxes do not improve green economic growth immediately, it is important to gradually implement these taxes to allow industries and consumers time to adjust and invest in green alternatives.

The Green Deal policy and Sustainable Development Goals require that the economic development of a country should be reoriented towards ‘green‘ economic development. Currently, the globalisation and intensification of production boosts urbanisation in many countries, which may stimulate economic growth and improve citizen well-being, but may also lead to excessive consumption of resources and negative environmental impacts. Against the backdrop of these challenges, it is expedient to estimate the effects of urbanisation on the green growth of a country and define the relevant changes and instruments for achieving green growth in a country in view of urbanisation. The research covers the EU countries and Ukraine (as an official candidate for European Union membership) in the period of 2005–2020. Applying the Global Malmquist–Luenberger productivity index (to estimate green economic growth); a fixed and random effects model, GMM modelling (to evaluate the impact of urbanisation on green economic growth), this study aimed to contribute to the theoretical framework of green economic growth by extending input and undesirable output parameters of a country’s productivity. The findings revealed that, in 2020, as compared to 2005, green economic growth went into a decline in all countries analysed, this decline stemmed from accelerated urbanisation. However, industrial structure and research and development appeared to be conducive to green economic growth, which justifies the idea that countries should focus on implementing structural reforms for the technological modernisation of infrastructure and industrial complexes to dispose of the shortcomings caused by urbanisation. To compensate for this negative impact, the findings of this research prompt a set of policy implications concerning dissemination of the green knowledge and technologies, green project implementation, reinforcement of incentive instruments and achievement of a synergistic balance of economic and ecological targets underlying the SDGs.

Green economic growth is the best alternative strategy for sustainable development. Existing literature investigated the determinants of green economic growth in China and provides mixed results. Thus, our study explores the impact of green environmental technology, financial innovation, and environmental regulations on green economic growth by controlling the impact of renewable energy consumption, trade, and education. The study explores the symmetric and asymmetric associations by employing ARDL and NARDL approaches. The ARDL long-run findings display that green environmental technologies, environmental regulations, and financial innovations positively and significantly contribute to green economic growth. However, the NARDL long-run findings infer that positive shock in green environmental technology, financial innovation, and environmental regulation exerts a significant and positive impact on green growth, while negative shock in green environmental technology, financial innovation, and environmental regulation has an insignificant impact on green growth. Based on the findings, the study delivers important policy implications to promote green economic growth in China.

PurposeThis study examined the how institutions influence green economic growth in the West African Economic and Monetary Union (WAEMU) countries with view to contributing to Sustainable development goal of good health and well-being (SDG 3), clean water and sanitation (SDG 6), decent work and economic growth (SDG 8), sustainable cities and communities (SDG11), responsible consumption and production (SDG12). MethodologyThe study made use of data sourced from the Development Indicators (WDI) and Governance Indicators (WGI) from 2002 to 2017 covering the eight (08) WAEMU countries. The study applied the Fully Modified Ordinary Least Squares (FMOLS), which is robust to the heterogeneity and endogeneity presence, to estimate the long-run parameters of the institutional quality effect on green economic growth. FindingsFindings obtained from the study show that the institution's quality influence differs across the countries of study. The findings implication is that institutional quality enhances green economic growth. In specific terms, institutions level enhances green economic growth in counties such as Cote d’Ivoire, Mali, Niger, Senegal, and Togo. On the contrary, it however, deteriorates green economic growth in other countries such as Benin and Burkina Faso. ConclusionAgainst this finding, the study recommends that there is the need for WAEMU countries to consider the improvement of institutional framework, making sure that a robust institutional mechanism such as elimination of corruption, improve government effectiveness, strong credibility of government commitments and policies, an efficient judiciary, sound policies and regulations to reach the green economic growth desired level. ImplicationThe findings implication is that good institutional framework such as good governance, control of corruption, political stability and absence of violence among others, are essential factors in promoting green economic growth. The findings highlight the importance of investment in renewable energy and sustainable agriculture as key drivers of green economic growth in the region. These findings have important implications for policymakers in the WAEMU region, as they provide evidence-based insights into the role of institutional quality in promoting sustainable and inclusive economic growth. OriginalityThe study extends the frontiers of knowledge on green economic growth by using green economic growth a new established indicator that makes use of economic and environmental indices to ensure accurate and assessable economic prosperity.

Assuring economic growth and development without neglecting the requirement for environmental sustainability has become the most debatable topic in recent international forums. As a result, researchers and decision-makers are now focusing on green growth instead of traditional economic growth. Several factors that influence green growth have been studied in the literature to date, however, the impact of foreign direct investment, trade openness and financial development is relatively unexplored. Therefore, this study employs a fully modified ordinary least squares (FMOLS) estimator to investigate the impact of foreign direct investment, trade openness, and financial development on green economic growth for ASEAN-5 countries from 2010 to 2021. The empirical results show that foreign direct investment and financial development have a positive impact on green growth, whereas trade openness has a negative impact on green growth. Considering the results, this study recommends that policymakers to encourage environmentally responsible foreign investment to invest in the home nation and enhance financial market competitiveness through domestic and international liberalization and privatization in order to promote green growth. We also suggest that policymakers to strengthen and enforce environmental regulations to prevent environmental degradation brought on by increased trade to support green economic growth.

With the increase in economic growth, the world is facing serious challenges concerning environmental sustainability. Hence, the green economic growth is imperative for sustainable and inclusive development. The objective of this study is to contribute to the existing literature about the factors that influence green economic growth. The study investigates the role of green technology, green energy, foreign direct investment, and globalization on green economic growth in G7 countries. The data of the study is collected from WDI, KOF Swiss Economic Institute, and OECD database and the data period ranges from 1995 to 2020. The existence of cointegration between the variables of the study was tested by Westerlund’s (Oxford Bull Econ Stat 69(6):709–748) cointegration test. Due to the presence of cross-sectional dependency, the study employed the cross-sectional autoregressive distributed lag (CS-ARDL) method to estimate the coefficients in the long and short run. The study also used a common correlated effect—mean group (CCEMG) estimator for robustness check. The findings of the study reveal that green energy and FDI positively contribute to green economic growth in the long and short run. The green technology also contributes positively to enhance green economic growth but only in long run. To accelerate green economic growth, G7 countries should incorporate policies promoting green energy and technology, while acquiring more foreign investments to ensure a sustainable development.

Green economic growth ensures the country’s wealth and population well-being with decreasing ecological damages. This strategy requires effective government policy to push economic agents to environmentally friendly behavior and significant financial resources to invest in technological modernization. The study aims to assess whether promotion of green economic growth in post-Soviet countries depends on direct and portfolio investment. The paper develops the index of green economic growth performance considering traditional economic growth, social, and environmental indicators. To determine the contribution of direct and portfolio investments in the promotion of green economic growth performance, regression equations (for the panel of countries as a whole and each country in particular) are developed. All models are supplemented with traditional economic growth control variables (GDP growth, inflation, gross fixed capital formation, trade). The information base is public data from the World Bank for the sample of 13 post-Soviet countries for 2000–2021. It was revealed that Estonia and Latvia have the highest level of green economic growth performance, while Ukraine, Uzbekistan, and Kazakhstan have the lowest. The most effective country (Latvia) uses its green economic growth potential only for 62.33%. Modeling results do not confirm the significance of foreign and portfolio investment contributions in promoting green economic growth in most post-Soviet countries (portfolio investments boost green economic growth in Estonia and Moldova, while foreign direct investments contribute to green economic growth in Ukraine). These results might be explained by a lack of institutional capacity and government efficiency to ensure effective absorption of investments.

As the digital economy develops rapidly and the network information technology advances, new development models represented by the network economy have emerged, which have a crucial impact on green economic growth. However, the relevant previous studies lacked the role of analyzing the direct and indirect effects of internet development on green economic growth at the prefecture-level city level. For this purpose, this paper aims to examine the intrinsic mechanism of the impact of internet development on green economic growth and provide empirical support for cities and regions in China to increase internet construction. Furthermore, the mixed model (EBM), which includes both radial and non-radial distance functions, is applied to calculate the green economic growth index. Fixed effect model and mediation effect model are also employed to test influence mechanisms of the internet development on green economic growth using panel data of 269 prefecture-level cities in China from 2004 to 2019. The statistical results reveal that internet development has contributed significantly to green economic growth. When the internet development level increases by 1 unit, the green economic growth level increases by an average of 5.0372 units. However, regional heterogeneity is evident between internet development and green economic growth, that is, the promoting effect of internet development on green economic growth is gradually enhanced from the eastern region to the western region. We also find that internet development guides industrial structure upgrading improves environmental quality and accelerates enterprise innovation, which indirectly contributes to green economic growth. And internet development mainly achieves green economic growth through enterprise innovation. Based on the above findings, we concluded that policymakers should not only strengthen the guiding role of social actors to promote the stable development of the internet industry, but also foster the construction of the three models of "internet+industry integration," "internet+environmental governance," and "internet+enterprise innovation" to promote green economic growth.

How R&D expenditure intermediate as a new determinants for low carbon energy transition in Belt and Road Initiative economies