Economic Growth and Sustainable Transition: Investigating Classical and Novel Factors in Developed Countries

Abstract

In this study, the factors affecting economic growth in developed countries within the context of their sustainability transition are explored. By analyzing both traditional and novel factors, we aim to expand the scientific knowledge of the drivers behind sustainable economic development. To achieve this purpose, some factors that have demonstrated the potential to positively impact economic growth while simultaneously promoting environmental sustainability are included. Research results demonstrate that a 1% increase in energy consumption is associated with a 0.314% increase in real GDP, indicating a positive relationship between energy usage and economic growth. Additionally, the consumption of renewable energy boosts a positive impact on sustainable economic growth: When it grows by 1%, the real GDP increases by 0.12%. The empirical findings further reveal that scientific progress and economic freedom are significant drivers of economic growth, as a 1% increase in both factors leads to an increase in economic output by 0.349% and 0.323%, respectively. By conducting a comprehensive analysis, we provide valuable insights into the complex interplay between economic growth and sustainability in developed countries. Based on these findings, the study offers specific policy recommendations, which include the diversification of the energy mix, the promotion of education and scientific advancement, and the digitalization of public services.