Institutional and Technological Dynamics for Ecological Structural Change: An Econometric Analysis

Abstract

This paper investigates the dynamics between institutional and technological factors driving ecological structural change in OECD countries from 1990 to 2020 by employing a feasible generalised least squares estimation on panel data. In particular, it explores how the pro-environmental institutional attitude and the green technological gap co-evolve and shape the ecological transition. Grounded in the post-Keynesian ecological macroeconomics, the analysis emphasises that green technological catching-up processes depend not only on technological capabilities but also on supportive institutional environments. Results indicate that environmental policy stringency positively influences technological advancement and green productivity. Indeed, robust institutional frameworks foster the diffusion of green technologies, reduce ecological disparities, and strengthen environmental performance. At the same time, findings suggest a positive impact of green innovations on pro-environmental institutional attitude. However, diminishing returns emerge as pro-environmental institutional attitude intensifies, suggesting the emergency of institutional and social resistance to continuous policy tightening. Overall, the study underscores how coherent ecological policies, institutional learning, and green absorptive capacities are key to narrowing the green technology gap and advancing green institutional change by highlighting the importance of sustained political commitment and international cooperation to ensure that ecological transition contributes to equitable and resilient economic development.