Economic Growth In OECD Countries Research Articles

Green energy, green innovation, and political stability led to green growth in OECD nations

This study analyzes the determinants of green economic growth in OECD countries, focusing on the role of technological innovation, clean energy adoption, environmental innovation, and political stability. Employing panel data analysis techniques, including Dynamic Seemingly Unrelated Regression (DSUR), Common Correlated Effects Pooled-FM (CUP-FM), and Common Correlated Effects Pooled-BC (CUP-BC), the study examines the asymmetric relationships between these factors and green growth over both the short and long run. The findings suggest that technological innovation significantly influences green growth in OECD nations, with positive and negative shocks in innovation showing distinct impacts on green growth consumption, which emphasizes embracing and expanding green technology to enhance sustainable economic development and minimize environmental damage. Similarly, clean energy adoption plays a crucial role in fostering green economic growth, with positive relationships observed between renewable energy consumption and green growth in the short and long run. Environmental innovation also positively correlates with green growth, highlighting the significance of developing new products and services to manage environmental challenges. Besides, political stability is a critical determinant of green growth, with stable political environments fostering investor confidence and encouraging long-term sustainable investments. The study underlines the complex interplay between these factors, emphasizing the bidirectional causality relationships observed among clean energy adoption, political stability, innovation, and urbanization. These findings underscore the multifaceted nature of sustainable development pathways, highlighting the need for integrated policy approaches to promote green growth agendas. The study contributes to comprehending the factors driving green economic growth in OECD countries and provides insights for policymakers and practitioners seeking to advance sustainability goals. By underlining the importance of technological innovation, clean energy adoption, environmental innovation, and political stability, the study proposes valuable insights into the pathways toward achieving environmentally sustainable and economically viable growth.

Testing for Granger causality in heterogeneous panels with cross-sectional dependence

AbstractThis paper proposes a panel Granger causality approach for heterogeneous panels with cross-sectional dependence. We define a panel VAR model with unobserved common factors and apply the PANIC procedure to obtain the de-factored data. We then estimate the lag augmented (LA)-VAR model for each cross section and construct the panel statistics based on the meta-analytic approach that combines the p-values of the individual statistics. The Monte Carlo simulations indicate that the combination tests show good size and power properties and appear suitable for the panels where cross sections may have different unit root or co-integration properties. We finally re-investigate Granger causality between export and economic growth in OECD countries. The results shed light on the importance of accounting for cross-sectional dependence within a factor model framework in determining direction of Granger causality for country-specific analysis. The results further reveal that export and economic growth do not cause each other in the majority of the European Union countries.

Long-term relationship between investment and economic growth: a cointegration analysis of OECD countries

This article investigates the impact of domestic investments on economic growth in OECD countries from 2000 to 2020. It identifies factors affecting economic growth and analyzes the relationship between domestic investments and economic growth using econometric models. Empirical data from the World Bank, IMF, and OECD reports supports the positive impact of domestic investments on economic growth in OECD countries. The study also finds a long-term causality between GDP and Gross Fixed Capital Formation (GFCF). These findings offer valuable insights into investment dynamics and their effects on economic growth, informing governments and policymakers in OECD countries.

Savings, Investment and Economic Growth in OECD Countries in the Age of Crisis

Bu çalışmada; Ekonomik Kalkınma ve İşbirliği Örgütü (OECD) üyesi olan 38 ülkenin 2000-2020 yıllarına ait verilerinden hareketle kriz dönemlerinde tasarruf, yatırım ve ekonomik büyüme ilişkisi incelenmiştir. 38 ülke arasında 21 yıllık ağırlıklı ortalama verilerinde; tasarruf dışında, reel GSYH ve yatırımlarda en büyük değerler ABD’ye, en yüksek tasarruf oranı ise Şili’ye aittir. ABD için; tasarrufun, ekonomik büyümeyi etkilemediği, yatırımın ekonomik büyümeyi etkilediği görülmüştür. Tasarrufun ekonomik büyümeyi etkilememesi ABD’de tüketimin oldukça fazla olmasıyla açıklanmaktadır. ABD’nin reel GSYH değerlerinin yüksek olmasının sebeplerinden biri, dolar ile küresel ekonomide genel bir hakimiyete sahip olması gösterilebilir.

The effect of digitalism on the economic growth and foreign trade of creative, Information and Communication Technology (ICT) and high-tech products in OECD countries

The use of digital technologies has come to the fore in every aspect of life due to closures, social distance and bans during the pandemic period. Today, digital technologies are used in many sectors and their importance is increasing day by day. While digitalism refers to the increased use and integration of digital technologies, ICT appears to have a profound effect on economic growth and foreign trade in the creative and high-tech industries.
 In 2022, it is seen that 5.3 billion people, which corresponds to 66.3 percent of the world's total population, have access to the internet. Active mobile-broadband subscriptions has reached 86.9 percent in 2022 in the world. Exports in ICT goods were 2.77 trillion USD and ICT services were 848.4 billion USD in 2021. The share of ICT goods as percentage of total trade in the world was 13.2 percent whereas it was 7 percent in OECD countries. Share of ICT services as percentage of total trade in the world was 14 percent whereas it was 13.3 percent in OECD.
 The study aims to investigate the relationship between the export performance in “Creative”, “ICT” and “High-tech” products with their digital infrastructure and economic growth in OECD countries.
 The results show that there is a positive correlation between overall index scores and GDP per capita in OECD countries. “The share of ITC employment in total employment” and “the share of information and communication (ISIC rev4) in GDP” have a high positive correlation coefficient as 0.693 so that the correlation is significant even at the 0.01 level (2-tailed). “GDP growth rate” and “GDP growth in information and communication (ISIC rev4)” ” have a high positive correlation coefficient as 0.585 so that the correlation is significant even at the 0.01 level (2-tailed). “High-tech export share in total merchandise export” and “share of ICT goods as percentage of total trade, annual” have a high positive correlation coefficient as 0.656 so that the correlation is significant even at the 0.01 level (2-tailed). “The share of ITC employment in total employment” and “share of ICT services as percentage of total trade, annual” have a high positive correlation coefficient as 0.501 so that the correlation is significant even at the 0.01 level (2-tailed).

The nonlinear nexus between renewable energy consumption and economic growth in OECD countries: evidence from PTR and PSTR estimates

PurposeToday, the increasing use of fossil fuels, energy security, concerns and the great importance of achieving sustainable economic growth underscore the urgent need to transition to a green energy system as soon as possible. To shed light on the relationship between the economy and renewable energy, this study assesses the nonlinear relationship between renewable energy consumption and economic growth for 24 OECD countries between 1990 and 2015.Design/methodology/approachThe authors apply two nonlinear models: panel threshold regression (PTR) and panel smooth transition regression (PSTR).FindingsThe results show that the positive effect of renewable energy consumption on economic growth is conditional. On the one hand, the results of the nonlinear PTR model yielded a threshold value for renewable energy consumption of about 251.17. Below this threshold, the authors find a negative impact of renewable energy consumption on economic growth. However, above this threshold, renewable energy consumption becomes a favorable source of economic growth. Using the nonlinear PSTR model based on the gamma transition parameter of 2.014, the transition from low renewable energy consumption regime to higher is abrupt.Originality/valueReferring to previous studies analyzing linear causality between renewable energy and economic growth, most of the results show various mixed and non-stable effects over the study period. The contributions of this study consist in conduct a series of empirical tests of the nonlinear effects of renewable energy use on economic growth using two nonlinear approaches such as the PTR and PSTR models. If the authors show that such a relationship is nonlinear, it is essential to check whether the transition from one weak regime to another strong regime is abrupt or smooth, using the PSTR approach.

Impact of Oil Price on Economic Growth of OECD Countries: A Dynamic Panel Data Analysis

Crude oil usage in (Organization for Economic Co-operation and Development) OECD countries has been significantly higher since the early 1970s and therefore, oil can be considered as one of the driving forces of the OECD economies. Moreover, oil prices have been frequently fluctuating over time, creating adverse economic and social impacts. The study examines the impact of oil price on the economic growth of 38 OECD countries over the period 2000–2020, through four channel variables such as real interest rate, exchange rate, government expenditure and investment. A dynamic panel data analysis based on Generalized Method of Moment (GMM) is employed to accomplish the objective of the study. The study confirms that there is a mixed impact of oil price on economic growth. More specifically, an increase in oil price positively affects economic growth only through interest rates while the oil price hike negatively affects economic growth through all other channel variables such as exchange rate, government expenditure and investment. Since the total negative effect of oil price on economic growth outnumbers the positive effect, the net impact of an oil price hike on economic growth is negative. Hence, the study strongly recommends applying appropriate polices to reduce oil price fluctuations while encouraging the use of country-specific renewable energy sources.

Entrepreneurial conditions and economic growth in entrepreneurial ecosystems: Evidence from OECD countries

This study analyses the potential influences of entrepreneurial framework conditions on the economic growth of OECD countries. We correspondingly divided these countries into groups according to their income level (high- and upper-middle-income economies) with the data, structured into an unbalanced dynamic longitudinal panel (2000–2020), obtained from the National Expert Survey, Global Monitor Entrepreneurship and the World Bank. After applying the generalised method of moments, we may report that commercial, professional, physical and service infrastructures, government support and policies, R&D transfers, cultural and social norms and financing entrepreneurs positively affect economic growth independently of the national income level. Basic entrepreneurial education does not attain significance in explaining the economic growth of high-income economies and post-education is not significant in explaining the economic growth of upper-middle-income economies. Furthermore, government programmes generate negative effects on the economic growth of OECD countries when considered jointly and individually in high-income economies but with a positive effect on upper-middle-income economies that display an inverse behaviour in the case of the effects of taxes and bureaucracy. The upper-middle-income economies also registered a negative effect in terms of internal market dynamics and openness even while this factor returned positive effects in high-income economies.

Greening China: Environmentally adjusted multifactor productivity in the last four decades

This paper links "green" and "growth" to produce a measure of economic and environmental performance and natural resource depletion based on an expanded accounting framework: the environmentally adjusted multifactor productivity (EAMFP), which provides a new perspective to examine China's post-1978 economic growth. The results show that China's annual economic growth would be overestimated by 1.14 percentage points over the past four decades averagely. The EAMFP growth maintains positive at an average annual rate of 3.07%, moderating the MFP growth by 1.11 percentage points. It could be further improved compared to the EAMFP-driven economic growth in OECD countries. Benefiting from the greater efforts in environmental and natural resource regulation since 2013, China's growth may be revised upwards by 0.43 percentage points. The contribution of natural capital to economic growth falls from 0.41% to 0.06% per year, and the adjustment of pollution changes from negative to positive.

Do green finance and innovation matter for environmental protection? A case of OECD economies

As climate change has become an increasingly pressing threat, the active advent of green innovation and reducing environmental pollution have also become the driving forces for cleaner economic growth, and a healthier environment. In this regard, numerous research studies have identified all the different aspects that affect environmental pollution. However though, research studies have overlooked green finance initiatives and innovations' impact on trade-adjusted CO2 emissions. Therefore, this study emphasizes upon the significance of green finance, and green innovation in achieving sustainable development. This research study fills the gap by studying the effect of green finance on trade-adjusted CO2 emissions, particularly in the presence of green innovation, environmental policy stringency, international trade, and economic growth for OECD countries. In this context, the cointegration analysis demonstrates that green finance, green innovation, environmental policy stringency, GDP, exports, imports, and carbon emissions have a long-run association with one another. The results of the method of movement quantile regression (MMQR) analysis show that green finance significantly reduces carbon emissions in OECD countries. Similarly, the results for green innovation also show a significantly negative relationship with trade-adjusted CO2 emission. The findings reveal that green finance and the innovations' magnitude of impact on carbon emission is higher, specifically at the higher quantiles. Moreover, economic growth and imports tend to have a positive impact on carbon emissions, whereas exports and environmental policy stringency decrease carbon emissions and boost environmental quality. Policymakers and regulators should therefore focus on green finance and green innovation, in order to mitigate trade-adjusted CO2 emissions and attain the sustainable environmental goals set by OECD countries.

Innovation Input, Climate Change, and Energy-Environment-Growth Nexus: Evidence from OECD and Non-OECD Countries

With economic growth and rising incomes, increasing consumption of fossil energy is leading to environmental pollution and climate change, which requires increased innovative inputs to promote the efficiency of renewable energy use. Considering the important impact of innovation input and climate change on renewable energy consumption, greenhouse gas emissions, and green economic growth, this study uses simultaneous equation and sys-GMM model to explore the dynamic nexus of innovation input, climate change, and energy-environment-growth in OECD and non-OECD countries, with panel data covering 2000 to 2019. The empirical results show that renewable energy consumption in non-OECD countries significantly promoted green economic growth, while OECD countries did the opposite. Moreover, renewable energy consumption significantly reduces greenhouse gas emissions caused by climate change, especially for OECD countries. When the level of economic growth exceeds a certain inflection point, greenhouse gas emissions begin to turn from positive to negative, which further verifies the EKC hypothesis. In addition, this study found that innovation input has significantly increased renewable energy consumption, reduced greenhouse gas emissions, and promoted green economic growth in OECD countries. Finally, this study also found that the impact of innovation input in OECD and non-OECD countries on the energy-environment-growth nexus is greater in the short term and more significant in the medium and long term, while the impact of climate change on the energy-environment nexus in OECD and non-OECD countries is more significant in the medium and long term.

The relationship between health expenditure indicators and economic growth in OECD countries: A Driscoll-Kraay approach.

The main purpose of the study is to examine the relationship between health expenditure indicators and economic growth in OECD countries. In this context, health expenditures and economic indicators data of 21 OECD countries were analyzed by the Driscoll-Kraay standard error approach within the scope of panel data analysis. While Gross Domestic Product (GDP) and income per capita were used as dependent variables, the amount of out-of-pocket health spending, per capita health expenditure, the amount of public health expenditure, the ratio of drug expenditures to gross domestic product, the share of current health expenditures in GDP were used as independent variables. According to the results, in the model (Model 1) where real GDP level was used as the dependent variable, all health expenditure indicators were positively related to the economic growth. When the estimation results of Model 1 are examined, it is predicted that there will be an increase of 0.09% in GDP in case of a 1% increase in the share allocated to health services from GDP. In case of a 1% increase in the amount of out-of-pocket spending on healthcare, it is foreseen that there may be an increase of 0.04% in the real GDP. In the model (Model 2) where the per capita income variable is the dependent variable, it is seen that the increase in out- of-pocket health spending has a decreasing effect on the per capita income level, while the increase in public expenditures has an increasing effect on the per capita income level. From the findings of Model 2, it was found that if a 1% increase in the share of current health expenditures in GDP, there may be an increase of 0.06% in the amount of per capita income. Concludingly, it is possible to say that that public resources allocated to health services play an important role in the economic growth.

The role of Intellectual Property Rights in Enhancing Regional Development

Intellectual property rights (IPRs) are recognized as a growth enhancing factor for the economy. IPRs can influence the growth process through the domestic and external sectors of an economy. Therefore, researchers are increasingly interested in the role of IPR protection in the economic growth of countries. In OECD countries, most industries rely on innovation with innovative technology, hence, the role of IPR is important in stimulating the diffusion of knowledge to foster innovation that contributes to the regional development. Based on the above-mentioned, the research aims to analyze the role of IPR protection in enhancing regional development in OECD countries. The study uses the latest data set from the OECD and World Bank. We found that IPRs have a positive and significant effect on regional economic growth in OECD countries. FDI is also highly significant effect on regional economic growth. The result of this study provides interesting results that will support policy makers in considering improving intellectual property rights of inventors when formulating policies for national and regional development.

Does environmental sustainability affect the renewable energy consumption? Nexus among trade openness, CO2 emissions, income inequality, renewable energy, and economic growth in OECD countries.

This study investigates the impact of carbon emissions, real oil prices, income inequality, economic growth, and trade openness on renewable energy consumption (REC) in twenty-three (23) OECD economies. The study employs the Westerlund panel cointegration technique to verify the existence of long-run equilibrium and the Augmented Mean Group (AMG) estimator to assess the long-run relationship between the variables, which allows for slope heterogeneity and cross-sectional dependency. Moreover, the panel causality test of Dumitrescu and Hurlin (DH) is utilized to gauge the causal relationship between the variables. The findings of our study reveal that REC is positively related to economic growth, real oil prices, income inequality, and trade openness, but negatively related to CO2 emissions in OECD countries. In addition, there is one-way causality from GDP per capita to renewable energy consumption and a bidirectional causality between income inequality and REC. Furthermore, the results indicate that OECD policymakers and governments should regard foreign trade as a "clean energy fostering mechanism" while developing energy demand policies that are environmentally friendly.

The Relationship Between Renewable Energy Consumption and Economic Growth in OECD Countries

The Relationship Between Renewable Energy Consumption and Economic Growth in OECD Countries

The Relationship Between Renewable Energy Consumption and Economic Growth in OECD Countries

The Relationship Between Renewable Energy Consumption and Economic Growth in OECD Countries

The Causal Relationship Between Tax Revenues and Economic Growth in OECD Countries

Governments can implement various policies to achieve the economic goals they want to achieve. Among the policies they most often apply to are monetary and fiscal policies. Among fiscal policies, taxes are an important policy tool. Tax revenues are one of the fiscal policy tools that policymakers apply to achieve the goal of economic growth. Changes in tax revenues can directly or indirectly affect economic growth through various channels. In this study, randomly selected in 9 OECD countries (France, Germany, Greece, Hungary, Italy, Poland, Spain, Turkey and United Kingdom) with annual data from the period 2010-2019, were investigated to find the relationship between tax revenues and economic growth using panel causality test. As a result of the panel causality test, it was determined that there is a unidirectional causality relationship from tax revenues to economic growth.

Linking Electricity Consumption, Tourism, and Economic Growth in OECD Countries

This study investigates the causal link between tourism, electric power consumption and economic growth in 34 OECD countries. Unlike previous studies, this study applies the panel VAR model with the Granger causality test, impulse response, and variance decomposition. The findings show a positive trend for all variables. As economic growth increases, tourism receipts and electricity consumption are increasing as well. The results reveal bi-directional causal relationship between all of the variables, and the findings are consistent with previous studies. These findings may encourage the decision-makers to make the necessary efforts to create a friendly environment for sustainable tourism.

Education and Economic Growth: ıs There a Role for Governance? a Comparison between MENA and OECD Countries

The outcomes of education and growth are mixed. This paper revisits the debate on the impact of education on economic growth by focusing on the effect of governance. Our sample covers 13 countries in the Middle East & North Africa and 37 OECD countries during the period 1990- 2020. For a dynamic panel type model, we preferred the GMM estimation approach in order to appropriately verify the relevance of the supporting indicators. Our objective is to determine whether the effects of education and governance on growth depend on the level of development of the country. Our results show that good governance contributes to economic growth in OECD countries. Strong governance raises the level and quality of education of the population and stimulates growth. The governance system is still being built for the nations of the MENA region, and it has several flaws. These results have important policy implications. Governments in the MENA region must invest more domestic resources in education and raise the standard of their institutions by implementing good governance practices if they want to improve output. Economic performance is possible when the governing principles are applied strictly, severely, and effectively. The advancement of education and the achievement of economic prosperity require efficient governance.

Relationship between Economic Growth and Energy Consumption from the Perspective of Sustainable Development.

While promoting the economic growth, energy has also brought pollution problems to the world environment, which has gradually become a bottleneck impeding sustainable economic development. In view of the rapid evolution of urbanization and industrialization, economic growth is increasingly dependent on the energy consumption, the development of the two is difficult to coordinate, and the internal contradictions are becoming increasingly serious, which hinders the sustainable development of economic growth. This study establishes the relationship between energy consumption and economic growth according to the energy Kuznets curve and studies the future trend of China's sustainable development through the comparative analysis of the energy Kuznets curve of the United States and Germany. The results show that, at the turning point of energy consumption, China's energy economic rate is higher than that of Germany and the United States. In addition, in terms of urbanization rate and industrial structure, although China's tertiary industry has made a breakthrough, it is still lower than that of the United States and Germany, but the level of urbanization rate has made significant progress. In short, China has obvious advantages in future economic development and has a late developing advantage compared with the United States and Germany. This paper makes an empirical analysis of the relationship between energy consumption and economic growth in OECD countries and finds out the turning point of energy consumption, so as to provide a theoretical basis for coordinating China's energy consumption and economic growth.