Economic Growth In G7 Countries Research Articles

Impact of green technology and energy on green economic growth: role of FDI and globalization in G7 economies

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.

Nexus between renewable energy and economic growth in G7 countries: New insight from nonlinear time series and panel cointegration analysis

This study aims to investigate the impact of renewable energy consumption on the economic growth of G7 countries and explore the potential nonlinear relationship between the two variables. Initially, the NARDL model is employed to analyze the G7 countries, allowing for the control of nonlinear relationships and considering asymmetric effects. The findings of the NARDL model reveal an asymmetric long run cointegration relationship between renewable energy consumption and economic growth in Canada and the US, while other countries show different dynamics. Subsequently, a causal dynamic impact analysis is conducted to gain further insights into the relationship between renewable energy consumption and economic growth. In the next step, the advantage of panel data analysis is utilized to investigate the overall impact across all G7 countries. For this purpose, the study extends the NARDL model to the PNARDL (Panel Nonlinear Autoregressive Distributed Lag) model, which facilitates the control of asymmetric effects and nonlinearity in the panel data model. In this context, this study is one of the first studies to control the nonlinearity in panel data analysis. The results from the PNARDL model demonstrate that renewable energy has a positive long-term relationship with economic growth in G7 countries; however, this relationship is statistically insignificant.

The dynamic relationship between military expenditure, environmental pollution, and economic growth in G7 countries: A wavelet analysis approach

This study applies wavelet analysis to examine the interplay between treadmill of destruction theory and environmental Kuznets curve theory in G7 countries over the period 1970–2018. The results indicate that, in the short term, co-movement and causality exist between military expenditure and environmental pollution at different frequencies and times. Positive causality runs from military expenditure to environmental pollution in Italy, the United Kingdom, the United States, Canada, and Germany in different sub-periods. After adding economic growth as a control variable, positive causality runs from military expenditure to environmental pollution in Italy, the United Kingdom, Japan, the United States, Canada, and France in different sub-periods. Decision-makers can refer to the empirical results to consider the direction of policy and managerial implications at macroeconomic and microeconomic levels.

How do renewable energy, gross capital formation, and natural resource rent affect economic growth in G7 countries? Evidence from the novel GMM-PVAR approach.

This paper is to examine the dynamic causal relationship between economic growth, renewable energy consumption, and CO2 with a broad perspective. The study is analyzed by dividing into two main parts. Growth and energy consumption in the first part, and the relationship between renewable energy and CO2 in the second part, within the framework of the basic hypotheses in the literature. On the other hand, as an observation group, the G7 economies were examined in the 1997-2019 period. According to PVAR regression estimates, if GDPPC increases by 1%, REN decreases by 0.81%, while CO2 increases by 0.71%. However, CO2 and REN do not appear to have any influence on growth. According to the causality estimates, a unidirectional causal relation from GDPPC to CO2 and REN was determined. In this case, the conservation hypothesis is valid. Considering the relation between CO2 and REN, no significant relation was found between the two variables in both regression and causality estimations. In this case, the neutrality hypothesis is valid between the two variables. It is seen that the diversity of energy sources or the investments made in them are inefficient. Our study offers a different perspective on energy resources and air pollution for the G7 economies.

Quantile connectedness between CO2 emissions and economic growth in G7 countries

Motivated by the importance and implications of COP26, we study the interrelationship between CO2 emissions and economic growth in G7 countries. For this aim, we employ the quantile-vector autoregression approach to investigate the distributional asymmetric interdependence that exists between emissions and growth over a period of 202 years ranging from 1820Q1 to 2021Q4. The covered period is long and includes several episodes of turmoil that lead to discrepancies in the results when using regression analysis based on the median. Our main findings show that the dependence structure between environment degradation and economic growth is mainly asymmetric and time-varying. Spillovers between CO2 emissions and economic growth are characterized by quantile asymmetry and heterogeneity among the group of G7 countries. We underline the two-way linkage between CO2 emissions and economic growth. CO2 emissions is in most a net transmitter in North America region (USA and Canada) at the beginning of the study period (before 1850) and the end of the period (after year 2000) whereas it shows different patterns in Europe (UK, Italy, France, Germany) and Japan where CO2 emissions is in most a net receiver at the beginning of the study period and a net transmitter at the end of the study period.

The Link between Economic Growth and Sustainable Energy in G7-Countries and E7-Countries: Evidence from a Dynamic Panel Threshold Model

The available literature on sustainable energy use and economic growth nexus yields conflicting conclusions, as the effect can be positive, negative, or insignificant. This research explores the causal link between sustainable energy use and economic growth in G7-countries (Japan, Canada, Germany, Italy, France, United Kingdom, and United States) and E7-countries (Russia, Brazil, Indonesia, China, Mexico, India, and Turkey) countries from 1990 to 2019. We discover that sustainable energy use and economic growth are proportional. Our results show that sustainable energy use positively affects economic growth if E7-countries exceed a specific threshold. It is detrimental to economic growth for the E7 countries' sustainable energy use to fall below a certain threshold. The use of sustainable energy has no significant impact on economic growth, although it does have a positive and noticeable impact in the G7 countries. In order for the countries of the G7 to see positive economic growth as a result of their investment in renewable energy, it is necessary for those nations to surpass a certain threshold in terms of their use of sustainable energy.

A Path Towards Green Revolution: How do Environmental Technologies, Political Risk, and Environmental Taxes Influence Green Energy Consumption?

Enhancing green energy consumption is the most important strategy to achieve environmental goals and control global temperature rise. Unquestionably, political intuitions make decisions for developing environmental technologies and imposing environmental taxes for phasing out fossil fuels and achieving energy transition. Therefore, this study explores the role of environmental technologies, political risk, and environmental taxes in green energy consumption considering the potential impacts of population density and economic growth in G7 countries. Second-generation tests are applied for analyzing the long-run equilibrium connection and stationarity features. Finally, the CuP-FM and CuP-BC estimators are applied for assessing long-run linkage and Dumitrescu-Hurlin causal test is applied to reveal causal flow among variables. The estimates uncovered that enhancing environmental technologies and environmental taxes upsurges the consumption of green energy. Reducing political risk in G7 countries also boosts green energy consumption. Economic growth is evidenced to stimulate the consumption of green energy, while population density limits the consumption of green energy. Moreover, environmental technologies and political risk Granger cause green energy utilization, while a feedback relationship exists between environmental taxes and green energy usage. Based on the results, this study suggests that G7 countries should allocate more funds to accelerate innovation in environmental technologies and, at the same time, reduce the political risk to boost green energy consumption.

How Do Green Finance and Energy Efficiency Mitigate Carbon Emissions Without Reducing Economic Growth in G7 Countries?

Climate change is one of the most serious threats facing the world today. Environmental pollution and depletion of natural resources have been highlighted by the United Nations Sustainable Development Goals (SDGs), paving the way for modern concepts such as sustainable growth to be introduced. Therefore, this research explores the relationship between green finance, energy efficiency, and CO2 emissions in the G7 countries. The study uses panel data model technique to examine the dependence structure of green finance, energy efficiency, and CO2 emissions. Moreover, we use DEA to construct an energy efficiency index of G7 countries. A specific interval exists between the values of the energy efficiency indexes. Japan, the United Kingdom, and the United States were named the most energy-efficient countries in the world, based on results obtained for five consecutive years in this category. However, according to the comparative rankings, France and Italy are the most successful of all the G7 members, followed by the United Kingdom and Germany. Our overall findings of the econometric model confirm the negative impact of green finance and energy efficiency on CO2 emissions; however, this relationship varies across the different quantiles of the two variables. The findings in the study confirm that green finance is the best financial strategy for reducing CO2 emissions.

An Analysis of Economic Growth for Major Advanced Economies

The study's main aim is an analysis of economic growth in G7 countries. The period examined in the study in which annual data was used covers 2001-2021. For this purpose, a panel data analysis was conducted. Economic growth is a function of account balance, employment, inflation, and investment, and there is a positive relationship between economic growth and employment and between inflation and investment. Conversely, there is a negative relationship between economic growth and account balance. The results are statistically significant. The highest contribution to economic growth in G7 countries comes from technological innovations. Economic growth is a dynamic area. Many factors affect economic growth, including geography, democracy, market form and technology, and cultural and religious factors. For this reason, economic growth covers a broad study area.

Nexus between carbon dioxide emissions and economic growth in G7 countries: fresh insights via wavelet coherence analysis

This study aims to revisit the evidence of co-movement and lead-lag nexus between carbon dioxide emissions and economic growth in G7 countries over a period of two centuries by using the wavelet coherence analysis. The key findings reveal (i) a cyclical relationship between carbon dioxide emissions and GDP per capita, which implies that during the upswing phase of business cycles, economic growth and carbon dioxide emissions both grow, but the latter can be predicted using GDP as an indicator function at the 1- to 2-year scale. (ii) A time-scale bidirectional causality between carbon dioxide emissions and GDP per capita. This implies that carbon dioxide emissions cannot be reduced without adversely affecting economic growth. Further, the finding also implies a rapid adoption of alternative clean energy sources to reduce carbon dioxide emissions without depressing economic growth.

Relationships Between Defence Expenditures and Economic Growth in G7 Countries: Panel Bootstrap Causality Analysis

It is important to reveal the relationship between defence expenditures and economic growth for both developed countries and developing countries. Dynamic political and economic developments affect defence expenditures. Many macroeconomic variables of countries are affected by the change in defence expenditures. Economic growth comes first among these macroeconomic variables. This study aims to determine the relationships between the economic growth and defense expenditures of the G7 countries for the period 1988-2018. For this purpose, the relationships between variables were examined using bootstrap panel causality analysis developed by Kónya (2006). According to the analysis results, it was found that there is a unidirectional causality relationship from defense expenditures to economic growth in the USA, Germany, Japan, England, and Canada. The sign of causality relationships is negative in the USA, UK, and Canada, and positive in Germany and Japan. On the other hand, in the findings of the study, an insignificant causality relationship was found between variables in France and Italy. Besides, for the G7 countries, an insignificant causality relationship has been determined from economic growth to defense expenditures. Economic and political inferences were made based on the findings obtained at the end of the study.

Renewable, non-renewable energy consumption and economic growth nexus in G7: fresh evidence from CS-ARDL.

This study investigates the effects of renewable energy (REN) consumption and non-renewable energy (NREN) consumption on economic growth in G7 countries with annual data covering the period 1980-2016 using a new panel data estimator that provides robust results under cross-sectional dependence, slope heterogeneity, and can be used whether series are integrated in different orders. In addition, the causality between the variables is analyzed with the panel bootstrap Granger causality method takes cross-sectional dependency and slope heterogeneity into account. According to Cross-sectionally Augmented Autoregressive Distributed Lag (CS-ARDL) results, the coefficients of REN and NREN consumption are positive and statistically significant in both the short- and long-run. Furthermore, NREN consumption has a greater impact on enhancing economic growth than REN consumption. The panel bootstrap causality analysis reveals that the growth hypothesis (GH) is valid in REN in Canada, Italy, and the USA; neutrality is valid in REN in France, Japan, and the UK; the feedback hypothesis (FE) is valid for REN only in Germany. For NREN, the GH is valid for Canada, France, and Germany; the conservation hypothesis (CH) is valid in Italy and the UK. Finally, the FH is valid in Japan and the USA.

The Nexus Between Domestic Investment and Economic Growth in G7 Countries. Does Internet Matter?

We examine the effect of the Internet on the relationship between domestic investment and economic growth. Data for G7 countries over the period 1991–2018 are used for panel data analysis. Empirical analysis prove that domestic investment affect positively on economic growth, however the Internet doesn’t have any effect on economic growth. Also, the effect of domestic investment on economic growth proves to be not affected by the Internet.

The Relationship Between Trade Openness, Financial Openness and Economic Growth in G7 Countries

Dışa açıklık, ticari ve finansal açıklık olarak incelenmektedir. Bir ülkenin ticari ve finansal olarak dışa açık olup olmaması, ülke içerisinde uyguladığı ekonomi politikalarının diğer ülkelerle ne derecede uyumlu olduğunu ölçmeye yarayan bir araçtır. Ülkelerin neden ticari ve finansal liberalizasyona ihtiyaç duydukları, ticari ve finansal açıklığın büyüme üzerine etkileri ile açıklanabilir. Bu çalışmanın amacı da, G7 ülkeleri olarak bilinen, Kanada, Almanya, Fransa, İngiltere, İtalya, Japonya ve Amerika Birleşik Devletleri’ne ait, son 50 yılda, 1970-2020, ticari ve finansal açıklık göstergelerinin ekonomik büyüme üzerindeki etkisinin araştırılmasıdır. Panel veri analizi ile yapılan incelemeler sonucunda, ticari ve finansal dışa açıklığın ekonomik büyümede meydana gelen değişimleri açıkladıkları, ticari ve finansal dışa açıklıktaki bir artışın büyümede de bir artışa yol açtığı görülmüştür.

Modeling broadband, mobile telephone and economic growth on a macro level: Empirical evidence from G7 countries

Information and Communications Technology (ICT) has played overwhelming roles in the economic and social development of nations and continents in the last two decades. This study aims to explore the impact of mobile telephone and broadband use on economic growth in G7 countries using annual data covering the period of 2000-2017. We performed Pedroni cointegration, Kao cointegration, fully modified ordinary least squares (FMOLS), dynamic ordinary least squares (DOLS), and panel Granger causality tests to investigate the causal and long-run effects. The empirical findings reveal that (i) mobile telephone and broadband use contribute to economic growth in the long-run; (ii) changes in mobile telephone and broadband use significantly lead to a change in economic growth.

The relationship between tax revenue, government expenditure, and economic growth in G7 countries: new evidence from time and frequency domain approaches

In this study, the relationship between tax revenue, government expenditure, and economic growth has been examined for Canada, France, Germany, Italy, Japan, UK, and the USA—the G7 countries using annual data from 1980 to 2016. The study used two different panel causality approaches in order to make a comparison. According to the time domain panel causality test results, there are a bidirectional causality between economic growth and government expenditure but unidirectional causality between tax revenue and government expenditure. Moreover, there is no causal relationship between economic growth and tax revenue. On the other hand, frequency domain causality results show that there are a bidirectional short- and long-run causality between economic growth and tax revenue, and long-run causality between economic growth and government expenditure. The main finding is that the taxation policies to be implemented on the basis of the economic conjuncture of G7 countries are a powerful financial tool, with the potential to serve the economic objectives to be achieved.

The Effects of Feedback Between International Trade and FDI

Purpose– This study examines the interrelationships between foreign direct investment, international trade, and economic growth, with a particular focus on expanded global value chains since the 1990s. Design/methodology/approach– This study investigates the feedback effects between foreign direct investment and international trade on economic growth in G7 countries and South Korea by using the annual time series data between 1990 and 2018. Empirically, we perform the tests of unit roots, causal relation and cointegration. Findings–Foreign direct investment is a causal factor affecting international trade in G7 countries and Korea while trade is a causal factor influencing foreign direct investment in the US, France, Canada, and Korea, indicating a feedback relationship between net foreign direct investments and net exports. In particular, we find that a negative feedback increases the real income in the US and Korea, while a positive feedback increases the real income in France and Canada. Research implications or Originality– The results confirm that economic growth could be driven by the feedback effects between foreign direct investment and international trade.

Renewable and non-renewable energy consumption and economic growth in G7 countries: evidence from panel autoregressive distributed lag (P-ARDL) model

This paper aims to investigate the relationship between renewable and non-renewable energy consumption and economic growth in the G7 countries (Canada, France, Germany, United Kingdom, Italy and the United States) for the period of 1990–2015. The study used the Pesaran CADF panel second generation unit root test to verify the stationary properties of the variables. To examine the short-run and long-run dynamics the study employed panel autoregressive distributed lag (P-ARDL) model. The empirical findings suggest that there is a presence of cross-sectional dependency among the variables. The panel ARDL model confirms that energy price, labor force, and capital stock have positive and statistically significant long-run impact on economic growth in the G7 countries. The short run dynamics of the result recommend that there is a short run causality between non-renewable energy consumption and economic growth and capital stock to economic growth. The Hausman test found that PMG is more efficient than MG and DFE.

Relationship between GDP, Life Expectancy and Growth Rate of G7 Countries

Increase in life expectancy is a key indicator to gauge the economic development of a country. Enormous studies have been done to test this hypothesis, and the conclusion is still un-decided. This study aims to explore the impact of life expectancy on economic growth in G7 countries via regression approach. Keeping in view the unique population structure of each of these G7 countries, the trend of life expectancy for each country is also observed. Findings of the study indicate that life expectancy in G7 countries increases with constant rate. The increase in life expectancy is accompanied with the increase in Gross Domestic Product (GDP) per capita income. We have also included the population growth rate as another important factor contributing towards GDP. It is worth mentioning here that increase in life expectancy directly affects per capita real income due to higher expenditure on health. Moreover, it is also found that increase in GDP lessens the population growth.

Total, renewable and non-renewable energy consumption and economic growth: Revisiting the issue with an asymmetric point of view

Previous literature assumes a symmetric linkage between energy consumption and economic growth. However, a variation on energy consumption does not necessarily have the same impact on economic growth, or vice-versa. Considering this possible asymmetry between the variables, this study aims to examine the long- and short-run relationships between total, renewable and non-renewable energy consumption and economic growth in G7 countries over the period 1980–2014 by using the nonlinear autoregressive distributed lag (NARDL) and asymmetric causality approaches. Findings indicate that production function matters in determining the cointegration among the variables. The results of asymmetric and symmetric relationships and causality analyses, on the other hand, are found to be very volatile across production functions and energy proxies. When the energy consumption is measured by total energy use, however, the results provide strong support of an asymmetric relationship between energy consumption and economic growth in the long-run.