The impacts of economic policy uncertainty, energy consumption, sustainable innovation, and quality of governance on green growth in emerging economies

This study investigates the impacts of economic policy uncertainty (EPU), energy consumption (EC), sustainable technological innovation (STI), and quality of governance on green growth (GG). Besides, it examines the moderating effect of STI and governance quality on the association between EPU and GG. It applies a Pooled Mean Group Autoregressive Distributed Lag estimator for 25 emerging economies for periods 1991-2019. For the robustness test, we utilize the asymptotic distribution of the Cross-section Augmented Distributed Lag to control for cross-sectional dependence concerns. We drive two indicators for GG by applying the principal component approach and directional distance function. The findings imply that STI and quality of governance have significant positive impacts on GG. However, EPU and EC adversely impact GG in emerging economies. Besides, quality of governance and STI positively moderate EPU's influence on GG, implying that countries with better quality of governance and promote STI mitigate the detrimental effects of high EPU on GG. Moreover, we run the causality analysis to investigate the causal relationship between target variables and GG. Policy suggestions are proposed based on the results.

Automated summary

This study examines the effects of economic policy uncertainty (EPU), energy consumption (EC), sustainable technological innovation (STI), and quality of governance on green growth (GG). It also investigates the moderating effect of STI and governance quality on the association between EPU and GG. The findings suggest that STI and governance quality have significant positive impacts on GG, while EPU and EC adversely affect GG in emerging economies. Moreover, the quality of governance and STI positively moderate the influence of EPU on GG, indicating that countries with better governance quality and promotion of STI can mitigate the detrimental effects of high EPU on GG. Furthermore, a causality analysis is conducted to explore the causal relationship between the target variables and GG, and policy suggestions are proposed based on the results.