The Impact of Renewable Energy, Green Finance, and Carbon Emission on Economic Growth: Perspective from Newly Industrialized Economies

Abstract

This research assesses the dynamic affiliation among carbon emission, green finance, eco-innovation, international trade, digitalization, and cleaner energy and economic progress among the ten industrialized nations, namely Indonesia, Thailand, South Africa, Turkey, Philippines, Malaysia, India, Mexico, China, and Brazil, over the period 1990–2020. Utilizing a panel dataset, this research employs econometric approaches comprising of common correlated effects mean group (CCEG) and augmented mean group (AMG) to analyze the effects comprehensively. The results of this investigation reveal several noteworthy findings. Carbon emissions consistently adversely influence economic growth, underscoring the detrimental impact of environmental pollution on economic development. In contrast, eco-innovation, green finance, international trade, digitalization, and renewable energy have been discovered to impact economic growth significantly. This underscores the significance of investing in innovation that promotes environmental sustainability to drive economic development. This research offers pertinent knowledge regarding the interplay of environmental and economic indicators within the context of industrialized nations. By reducing carbon footprints and fostering sustainable economic practices, the research underscores the necessity for integrating green finance and renewable energy to achieve long-term ecological balance and economic resilience.