Do green innovations, renewable energy and government financial expenditure promote sustainable economic growth? Empirical evidence from oecd

Abstract

This study analyzed the impact of green initiatives, renewable energy and government spending on sustainable economic development in 33 countries of the Organization for Economic Co-operation and Development (OECD) over the period from 2001 to 2021. To mitigate issues of endogeneity, heteroskedasticity, and autocorrelation, the study used estimation methods such as Feasible Generalized Least Squares (FGLS) and Generalized Method of Moments (GMM). The results from the GMM estimation method show that both green innovations and government financial expenditure have negative impacts on economic sustainability. Factors such as high initial investment costs, uneven implementation efficiency of green innovation, and deficiencies in green program management may reduce economic sustainability. Meanwhile, renewable energy has a positive impact on sustainable economic development, through reducing dependence on fossil energy and minimizing pollution. These findings are expected to make a significant contribution to economic development to address energy intensity and enhance sustainability. Based on the research results, the authors propose policy implications and recommendations to promote sustainable development in OECD countries. These recommendations focus on optimizing green innovation, improving the efficiency of government spending, and promoting the application of renewable energy, in order to achieve long-term economic development and environmental protection