A Frequency Domain Causality Approach Towards the Management of Supply Chain Digitalization and Environmental Quality in Saudi Arabia: What Is the Role of Green Innovation?

Assessing the quality of the environment is absolutely essential. However, there has been a lack of research evaluating the impact of the dimensions of Supply Chain Digitalization on the environment. Therefore, this research examines the impact of Supply Chain Digitalization (SCD), Green Innovation (GIN), Financial Globalization (FIG), and economic growth (GDP) on Greenhouse Gases (GHGs) in Saudi Arabia from 2000Q1 to 2022Q4, employing the Autoregressive Distributed Lag (ARDL) model, Frequency Domain Causality (FDC) approach, and Multiple Quantile-on-Quantile (MQQ) analysis. Saudi Arabia is considered a key player in SCD due to its strategic location in global trade, the alignment of its Vision 2030 economic diversification goals, and its significant investment in digital infrastructure and skills. The ARDL outcomes showed that in the short run, SCD and GDP increase GHGs, while GIN and FIG reduce GHGs. In the long run, SCD and GDP drive GHGs, while GIN reduces GHGs. The FDC test shows that SCD and FIG Granger-cause GHGs in the long term, while GDP Granger-causes GHGs in the short and long term. The MQQ analysis confirms that at lower quantiles, the combined effect of SCD, GIN, FIG, and GDP on GHGs tends to be negative. However, at middle and higher quantiles, the effect becomes positive. Based on these results, policies are recommended.