Digitalization and Climate Change Spillover Effects on Saudi Digital Economy Sustainable Economic Growth

Abstract The technological and environmental externalities associated with geographical innovation in green technologies play a key role in balancing economic development with the need to protect the environment. The current study goal is to analyse the digital technology and climate change spillover effects on the Saudi digital economy’s sustainable economic growth to support the achievement of Saudi Vision 2030. The development of the framework and model focuses on integrating issues of digital technology (innovation) and CO 2 emissions (climate change) to ensure sustainable economic growth and long-term development. To achieve the main goal of this study, the FMOLS method is used to estimate the data. The estimated result indicates a robust positive correlation between labour input and Saudi economic growth, while the digital technology coefficient correlation with economic growth is found significant with a negative value. CO 2 emissions as a proxy for climate change are found to be positively linked with economic growth. Boosting economic growth is often accompanied by expanding economic sectors that rely heavily on energy consumption. The contribution of the green total factor productivity (GTFP) as a technological progress indicator was negative. The study’s conclusions provide insights into the economic effects of digitalization and climate change to sustain economic growth as one of the most significant sustainable development goals (SDGs) to achieve Saudi Vision 2030 by promoting cooperation and smart partnerships in the public and private sectors of KSA as well as across countries in terms of global knowledge transfer, technological advancement, development of intellectual property, and digital assets.