Fostering Green Economic Growth: Exploring the Synergy of Green Innovation, Energy Efficiency, and Foreign Direct Investment in OECD Nations

Abstract

Abstract Due to continuous increase in economic growth all over the world, countries have faced increasing environmental and social issues. Due to harmful environmental consequences of economic growth, green economic growth is vital for sustainable development. However, despite its significance, the driving factors of green growth remain underexplored in empirical evidence. Moreover, technological innovation, efficient energy consumption and investment in green projects may direct the movement of green growth. Therefore, this study looks at how green innovation, energy efficiency and foreign direct investment impact on sustainable economic growth in OECD countries. The study's data ranged from 2000 to 2019 and collected from WDI and OECD databases. Cross-Sectional Dependency, Unit Root test, and Pannel Cointegration test were used in this study to address the data problems. We use Cross-Sectional Autoregressive Distributed Lags (CS-ARDL) estimator for long and short runs and Augmented Mean Group (AMG) test to check the robustness. The results show that green innovation, energy Efficiency and foreign direct investment affect green economic development significantly and positively, both over the long and short runs and help to improve sustainable economic development in OECD countries.