Investigating the Role of Greenfield Investment, Green Energy Transition and Ecological Governance Towards Green Growth in Emerging Economies

Abstract

Due to the detrimental environmental impacts, green growth provides a holistic and inclusive pathway toward achieving sustainable development goals, particularly by tackling the critical issues of climate change. Therefore, this study explores the role of stock market development (SMD), green energy transition (GET), Greenfield investment (GFI), ecological governance (EGO), and economic complexity (ECI) on green growth (GGR) across twelve emerging economies from 2003 to 2023. Utilizing advanced panel estimation techniques, including CS-ARDL and Driscoll-Kraay (DK) Standard Errors regression, the study confirms that GFI, SMD, ECI, and GET all contribute positively to GGR, while EGO has a negative impact. The findings also emphasize the significance of moderating effects: the interaction between stock market development (SMD) and economic complexity (ECI) significantly enhances green growth, as does the interaction between economic complexity (ECI) and Greenfield investment (GFI). Furthermore, the moderating effect of EGO with GFI contributes to increasing green growth. Based on these results, the study suggests that the government should promote Greenfield investment, expand the use of renewable energy, and prioritize energy-efficient and environmentally friendly technologies to support long-term sustainable development goals.