Towards the dream of go green: An empirical importance of green innovation and financial depth for environmental neutrality in world's top 10 greenest economies

Abstract

Going green is a wise choice regarding economic progress, social prosperity, and environmental neutrality. This topic is a concern worldwide and has been the heart of every strategy for decades. Therefore, the current study explores the key determinants that could be the way forward for policymakers. In this study, we analyze the importance of green innovation, technological innovation, financial depth index, information communication technology, GDP regarding CO2 emissions, and ecological footprint for the 10 greenest economies in the world from 1980 to 2019. The research is innovative in that it incorporates the concept of financial depth interaction with green and technological innovation. For analysis, the Banerjee and Carrion-i-Silvestre (2017) approach was applied for cointegration, while the innovative Method of Moments Quantile Regression (MMQR) and Dumitrescu and Hurlin (2012) causality test were used to examine the link among the variables. The outcome confirmed that green innovation and financial depth significantly reduce carbon emissions and ecological footprint, while the rise in information communication technology significantly increases emissions and ecological footprint in various quantiles. However, GDP significantly upsurges ecological footprint from the 25th and 50th quantiles. Finally, DH's causality (2012) also endorsed the outcome. Overall, findings suggest that investment in green innovation reduces environmental deterioration among the world's greenest nations. This study recommends improving nature conservation tax laws, promoting green investment, and implementing environmentally friendly policies to achieve SDGs.