Examining the symmetric and the asymmetric impacts of green innovation and digitalization on the European Union’s green economic growth

The ecological pressure of humans on the planet, measured as a footprint, has been increasing, posing a threat to the environment. At this point, green innovation emerges as the most effective solution for sustainable development, combining economic growth with environmental protection. This study examines the relationship between green innovation, digitalization, and green economic growth in 27 European Union Member States from 2000 to 2022, utilizing the PMG-ARDL and PMG-NARDL models to capture both symmetric and asymmetric effects. The findings reveal that green innovation significantly contributes to green economic growth, with asymmetric impacts: positive shocks increase green growth by 0.224%, while negative shocks reduce it by − 0.271%. Similarly, digitalization emerges as a critical driver of sustainable growth, facilitating advancements in energy efficiency, resource optimization, and environmentally friendly technologies. The study emphasizes the need for targeted policy interventions to maximize the benefits of green innovation and digitalization while mitigating adverse effects. To enhance efficiency and sustainability, policymakers should prioritize investments in green digital infrastructure, such as smart grids and data-driven energy management systems. Incentive mechanisms, including subsidies, tax benefits, and grants, foster green innovation across sectors. Furthermore, adaptive policies are necessary to address positive and negative shocks, ensuring resilience and long-term stability. Regional cooperation among European Union (EU) Member States should be strengthened to share best practices, align sustainability goals, and leverage collective resources for a unified transition toward green economic growth. These recommendations aim to support a sustainable and inclusive green economy, aligning with the EU’s environmental and economic objectives.