Harnessing digitalization to enhance private finance in resource-rich industries

Private investment, particularly in the fossil fuels industry, plays a crucial role in the sustainability puzzle for many countries. This study investigates the impact of digital innovation on private investment in resource-rich sectors, specifically fossil fuels, using data from 25 high-income countries between 2000 and 2022. The findings of CS-ARDL technique reveal that a 1% increase in the ICT development index leads to a short-term decrease of 0.34% in green deployment but a long-term increase of 0.60% in private investment. Additionally, the relationship between CO2 emissions and private investment in fossil fuels shows a short-term decline of 0.19%, followed by a long-term increase of 0.40%. While foreign direct investment (FDI) initially has a negative effect, it later contributes to technological advancements. Factors such as trade openness and patent registrations also facilitate private investment. The study recommends policies to promote digital technology adoption, public-private partnerships, information sharing, and support for research and development initiatives to drive sustainable investment.