A pathway to the green revolution in emerging economies: how does green technological innovation affect green growth and ecological sustainability?

Abstract

Green technological innovation (G.T.I.) contributes to making economic growth compatible with ecological sustainability (E.S.). Thus, in light of environmental challenges and attempts of emerging economies’ progress toward a green revolution, this study examines the effects of G.T.I. on green growth (G.G). and E.S. for 25 emerging economies from 1990 to 2018. It also investigates the moderating role of G.T.I. on the impacts of energy intensity and foreign direct investment (F.D.I.) on G.G. and E.S. to illustrate the energy rebound effect and pollution haven hypothesis. The Fully modified least square (F.M.O.L.S.), the Dynamic least square (D.O.L.S.), and the Pooled mean group autoregressive distributed lag (P.M.G./A.R.D.L.) estimators are used. The findings imply that G.T.I. positively impacts G.G. and E.S. in emerging economies. Conversely, F.D.I. and energy intensity have adverse effects on G.G. and E.S. However, the negative effects of F.D.I. and energy intensity on G.G. and E.S. are decreasing with respect to G.T.I., implying that emerging countries promoting G.T.I. minimize the pollution haven effects of F.D.I. and mitigate the negative effect of energy intensity. Therefore, G.T.I. is a vital factor to facilitate the pathway to the green revolution in emerging economies. Policy implications are forwarded based on the findings of the study.