Technological innovation, green innovation and green growth in developing and transition economies: any role for institutional quality?

Olabanji B. Awodumi (), Oluyemi Adeosun () and Noah Olasehinde ()
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Olabanji B. Awodumi: University of Ibadan
Oluyemi Adeosun: University of Lagos
Noah Olasehinde: University of Ibadan

SN Business & Economics, 2025, vol. 5, issue 10, 1-36

Abstract: Abstract The study examines the green growth-innovation nexus among 10 developing and transition economies with a view to understand whether general technological or green innovation matter for green growth. It also investigates the moderating role of institutional quality in the Link between green growth and each of technological and green innovation. The study utilizes data covering 1991–2021. For the individual countries, a system of simultaneous equation is constructed for each green growth-innovation nexus model and estimated with three-stage least squares (3SLS). Dynamic common correlated effects estimator is used in analysing the panel of countries. Results indicate that technological innovation significantly contributes to green growth in Argentina, Brazil, Columbia, Israel, Russia, South Africa, with strong feedback effect. Significant positive effect of green innovation on green growth is only confirmed in Argentina, Brazil, Columbia, South Africa. In Russia and Israel, green innovation does not promote green growth, but increasing technological innovation significantly raises it. In countries where both technological and green innovation spur green growth, the coefficients of technological innovation are larger. Institutional quality positively mediates the link between technological innovation and green growth in Brazil, Colombia, Mexico and South Africa, but no evidence of its influence on the green innovation-green growth nexus is found. Based on these findings, implications for policy are derived.

Keywords: Innovation; Green growth; Environment; Green innovation; Institutional quality (search for similar items in EconPapers)
JEL-codes: O4 O43 Q55 Q56 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s43546-025-00926-4

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