Enhancing sustainable development through digital economy and natural resource management in one belt one road countries

Abstract

This study investigates the cyclical effects of the digital economy and natural resources on green growth in Belt and Road Initiative (BRI) member countries from 1990 to 2020, addressing a critical gap in understanding how these factors interact across economic cycles. While prior research has examined the role of the digital economy and resource utilization on sustainable development, limited attention has been given to their cyclical impacts, particularly in the context of developing economies participating in the BRI. Motivated by the pressing need for evidence-based policies that balance economic growth with environmental sustainability, this study explores how the digital economy and natural resources influence green growth during expansions and contractions, considering the moderating effects of fiscal policies, innovation, financial development, and labor dynamics. This research analyzes the cyclical relationships among key variables using the augmented mean group estimator. The Hodrick-Prescott filter is employed to disentangle the positive and negative fluctuations of the digital economy and natural resources during business cycles. The results reveal that the digital economy (0.362) and natural resources (0.456) significantly boost green growth during economic expansions. In contrast, these factors negatively affect green growth during recessions, with impacts of −0.263 and −0.328, respectively. Moderating variables such as expansionary fiscal policy (0.318), ecological innovation (0.109), financial development (0.246), labor force (0.560), and gross fixed capital formation (0.306) contribute positively to green growth. However, contractionary fiscal policy (−0.495) exerts a notable adverse influence. Policymakers should prioritize advancing green growth by focusing on the digital economy, sustainable resource management, and expansionary fiscal policies during economic expansions. Sustaining green growth necessitates prudent resource management and adaptable fiscal policies during periods of economic recession.