IMPACT OF DIGITAL TRANSFORMATION ON SME GREEN INNOVATION IN DEVELOPING COUNTRIES

This study examines green innovation in SMEs within the energy sector, using green technology exports as a novel metric, across 10 developing countries from 2001 to 2022. Employing the Auto-Regressive Distributed Lag model and the Error Correction Model for long-term analysis, the study highlights the critical role of ICT investment. A 1% increase in ICT investment boosts green technology exports by 0.45% in the short term and 0.27% in the long term. Similarly, a 1% rise in internet users results in a 0.19% short-term and 0.08% longer-term increase in green technology exports. While mobile data usage has minimal impact, trade openness, financial development and industrial production are significant drivers of exports. These findings emphasize the importance of ICT investment, internet access and supportive policies in driving long-term green innovation among SMEs in developing nations.