Exploring the long-term impact of green innovation and environmental policy reforms on the economic performance: Evidence of panel data analysis

The article discusses the effects of green innovation and environmental policy on the growth rates of 78 countries between 2000 and 2020. In the context of the global sustainable development, it analyses the effect of environment-related technological innovation (green technologies) and state environmental policies using panel data on the economic performance (gross domestic product (GDP)) and the GDP per capita. The performance of green innovation and policy reforms is explored with the help of more sophisticated econometric tools, such as panel unit root tests, Cointegration tests, and Cross-Sectionally Augmented ARDL (CS-ARDL), Common Correlated Effects Mean Group (CCEMG), Augmented Mean Group (AMG), System GMM, and DCCE-IV estimators. The results show that green technological advances and strict environmental regulations have a positive effect on long-term economic growth as well as producing sustainable development. Also, renewable energy production and exports also contribute positively to economic performance to the improvement of an economy, but population growth has an ambivalent effect. These findings are provides evidence for policymakers on the fact that environmental reforms can lead to sustainable economic performance, and governments should adopt environmental friendly technologies, encourage renewable energy research and development, and introduce tougher environmental laws in order to balance economic growth and sustainability.