The Impact of Green Innovation, Energy Efficiency and Foreign Direct Investment on Green Economic Growth

Abstract

In recent years, as countries have faced increasing environmental, social, and economic concerns, the idea of sustainable development has attracted a lot of attention. In order to comprehend its complex components and provide a plan for achieving it, this paper conducts a thorough analysis of sustainable economic development. An excellent approach to sustainable development is green growth. It offers a means of addressing environmental problems and the use of natural resources. This research looks at how energy efficiency, green innovation, and foreign direct investment impact green growth. The study's data ranged from 2000 to 2019 and encompassed the OECD area of nations. A quantitative approach is used in the study, and secondary data from the WDI and OECD databases is acquired. Advanced diagnostic tests, such as the Multicollinearity, Correlation, Slop of Homogeneity, Cross-Sectional Dependency, Hausman test, Unit Root test, and Pannel Cointegration test, were used in the research to address the data problem. We use a sophisticated econometric strategy, such as the Cross Sectional Autoregressive Distributed Lags (CS-ARDL) estimator for long and short runs, based on these diagnostic tests. The results show that green innovation affects green economic development significantly and favorably, both over the long and short terms. Energy efficiency is determined to be a significant factor that favorably affects green development. Similarly, foreign direct investment has a big influence on green economic growth since it brings in money that is utilized to improve sustainable economic development in countries. Key Word: Green Economic Growth, Energy Efficiency, Foreign Direct Investment, Sustainable Development Goals, Environmental Quality