The causal relationship between green technologies, green innovation and GDP growth

This study investigates the relationship between green technologies, green innovation, and GDP growth across 85 countries over the periods 1990–2019 and 2009–2019. We employ a novel Granger non-causality test that accounts for cross-sectional dependence and heteroskedasticity. Our findings indicate that green technologies significantly contribute to GDP growth, particularly in emerging economies. However, regional heterogeneity exists, with developed economies showing more complex interactions between green innovation and GDP. These results suggest that tailored green growth policies are essential to maximise the economic benefits of green technologies. This study provides policymakers with insights into the role of green innovation in fostering sustainable economic growth.