Inclusive Innovation and Green Growth in Emerging and Developing Economies

Abstract Faced with the challenge of balancing economic transformation and environmental preservation, this study examines the role of national innovation capacity in green growth across 30 emerging and developing economies over the 2011–2022 period. Green growth is assessed through GDP carbon intensity, while national innovation capacity is measured by the Global Innovation Index (GII). The analysis is based on a dynamic panel model estimated using the System GMM method, supplemented by Difference GMM estimates, which allow for the potential endogeneity of innovation. The results highlight strong persistence in carbon intensity and suggest that overall innovation capacity does not have a sufficiently robust relationship with green growth in the sample studied. In contrast, gross fixed capital formation is associated with a reduction in carbon intensity in the main Difference GMM estimates. These results underscore that the contribution of innovation to green growth depends on the context in which innovation capabilities are developed and mobilized and does not automatically result from a general improvement in national innovation capacity.