Exploring the nexus between green innovations and green growth in G-7 economies: evidence from wavelet quantile correlation and continuous wavelet transform causality methods.

There are numerous studies on the nexus between technology and economic growth. However, the recent paradigm shift toward achieving green economic growth calls for divulging the important drivers of green growth to derive the salient policies for triggering the green growth process. In this context, the recent study claims green technologies (GT) as the crucial determinant of green economic growth (GG) and extends the prior literature by examining the dynamic effects of GT on GG for G-7 nations. To do so, the recent study relies on the two novel econometric methods of wavelet quantile correlation (WQC) and continuous wavelet transform causality (CWC) for robust findings. The WQC's results determine that the rise in the GT significantly triggers the GG of G7 economies. More specifically, with the exception of a few quantiles that show no significant effects of GT, Canada, Germany, Italy, and the United Kingdom enjoy significant benefits from GT across all quantiles. The remaining G-7 countries also benefit from GT, but a few quantiles show that GT has negative effects. Interestingly, the application of the CWC test supports the QWC's outcome, such that the CWC test confirms the causal nexus that runs from GT to GG for each economy. Based on the results, the study derives some salient policies for local and global authorities.
(© 2023. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.)