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

Abstract

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.