Digital Transformation as a Driver of Green Growth: Empirical Evidence from OECD Countries, 2000-2022

Moussa Hezla (), Asmaa Zeggane () and Hadjer Khechekhouche ()
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Moussa Hezla: Department of Economics, College of Business and Economics, Ouargla University, El Oued, Algeria
Asmaa Zeggane: Department of Economics, College of Business and Economics, Mostaganem University, Mostaganem, Algeria
Hadjer Khechekhouche: Department of Business Sciences, College of Business and Economics, Eloued University, El Oued, Algeria

Economic Research Guardian, 2025, vol. 15, issue 2, 232-267

Abstract: This paper examines the multidimensional nexus between digital transformation and green growth across 35 Organisation for Economic Co-operation and Development (OECD) countries over 2000-2022.It focuses on whether digital infrastructure and e‑government interact with renewable energy and environmental policy stringency to sustain productivity‑enhancing, low‑emission growth in advanced economies. Using harmonized OECD and UN sources, the study constructs a composite Digital Transformation Index via principal components analysis (PCA) and a production‑frontier‑consistent Green Growth Index. Second‑generation panel estimators that address cross‑sectional dependence, cointegration, and heterogeneity, alongside panel causality tests, are employed to identify long‑run linkages and directionality. Findings indicate that digital transformation, environmental policy stringency, online public service quality, and renewable energy are positively associated with green growth, whereas public environmental Research and Development (R&D) shows no direct contemporaneous effect. Policy implications call for coordinated investment in digital infrastructure, innovation‑friendly yet stringent environmental regulation, effective e‑governance, and mechanisms that translate R&D into scalable deployment.

Keywords: Digital transformation; green growth; Principal components analysis; Renewable energy consumption; OECD countries (search for similar items in EconPapers)
JEL-codes: C23 C38 O33 O44 Q56 (search for similar items in EconPapers)
Date: 2025
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