Factors Influencing Green GDP Growth in Southeast Asia: The Role of Foreign Direct Investment, Trade Openness, and Economic Development

This study investigates the key factors that drive Green GDP (GGDP) growth in Southeast Asia, focusing on foreign direct investment (FDI), trade openness, economic development, urbanization, labor productivity, and financial development. Utilizing panel data from 2009 to 2019 and employing a fixed-effects model, the findings indicate that economic development, labor productivity, and financial development are significant contributors to GGDP growth. The results underscore the importance of investing in green infrastructure and improving resource efficiency. In contrast, FDI and trade openness did not show a statistically significant effect, suggesting a need for policy reforms to channel investments and trade towards environmentally friendly sectors. Urbanization had a negative impact, highlighting the environmental challenges associated with rapid urban growth, thus calling for stronger environmental regulations and green urban planning. These insights suggest that Southeast Asian countries can further enhance GGDP growth through targeted policies that promote sustainable FDI, increase labor productivity, and support financial systems conducive to green projects.