The relationship between industrial production and green growth of OECD countries

Luljeta Sadiku () and Violeta Madzova ()
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Luljeta Sadiku: International Balkan University, Faculty of Economics and Administrative Sciences
Violeta Madzova: International Balkan University, Faculty of Economics and Administrative Sciences

Economics and Management, 2024, vol. 21, issue 1, 7-22

Abstract: Industrial advancement is the key pillar of countries' economic development. In addition to this, sound industrial policies are equally important for countries’ industrialization, and paramount to these policies is their alignment with the principles of sustainable development, particularly in promoting a transition towards a green economy. Central to this transition is the simultaneous pursuit of enhancing human well-being and fostering economic growth while mitigating environmental risks. Accordingly, the main purpose of this study is to make an empirical analysis on the relationship between industrial activity with the green growth factor, namely production-based CO2 emissions. The study includes OECD countries for the period 1990-2021. To examine the relationship between industry and an environmental and resource productivity variable, the panel regression models are employed. The results reveal that there is a significant positive relationship between value added in industry and production-based CO2 emissions. Therefore, policy interventions should aim to dissociate industrial growth from carbon emissions through targeted measures such as technological innovation, resource efficiency, and regulatory frameworks promoting cleaner production practices. These findings highlight the urgency for governments to integrate sustainability considerations into their industrial policies to foster green growth and ensure a resilient and environmentally sustainable future.

Keywords: industry; green growth; environmental sustainability; panel regression; OECD (search for similar items in EconPapers)
JEL-codes: C33 L60 Q50 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:neo:journl:v:21:y:2024:i:1:p:7-22

DOI: 10.37708/em.swu.v21i1.2

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