Diverging or converging to a green world? Impact of green growth measures on countries' economic performance

João J Ferreira; João M Lopes; Sofia Gomes; Claudia Dias

doi:10.1007/s10668-023-02991-x

Diverging or converging to a green world? Impact of green growth measures on countries' economic performance

Environ Dev Sustain. 2023 Feb 8:1-19. doi: 10.1007/s10668-023-02991-x. Online ahead of print.

Authors

João J Ferreira¹, João M Lopes², Sofia Gomes³, Claudia Dias⁴

Affiliations

¹ Department of Management and Economics & NECE-UBI - Research Unit in Business Sciences & QUT Australian Centre for Entrepreneurship Research, University of Beira Interior, Estrada do Sineiro, s/n, 6200-209 Covilhã, Portugal.
² Department of Management and Economics, Miguel Torga Institute of Higher Education & NECE-UBI - Research Unit in Business Sciences, University of Beira Interior, Estrada do Sineiro, s/n, 6200-209 Covilhã, Portugal.
³ REMIT - Research on Economics, Management and Information Technologies, University Portucalense, R. Dr. António Bernardino de Almeida 541, 4200-072 Porto, Portugal.
⁴ Research Unit in Business Sciences, NECE-UBI, Universidade da Beira Interior, Estrada do Sineiro, s/n, 6200-209 Covilhã, Portugal.

Abstract

Green growth has emerged in recent years to respond to environmental problems caused by climate change and the scarcity of resources. However, today's green growth involves environmental, social and financial dimensions. In this context, many countries are currently seeking green growth for their economic development through the efficient use of their resources. This study aims to assess the impact of green growth performance on the economic development of countries. A quantitative approach was applied to a sample of 172 countries worldwide, and the formulated hypotheses were tested through multiple linear regressions estimated by the ordinary least squares method. The economic development of countries was measured by the Human Development Index (HDI) and measures the sustainability performance of countries by the Green Growth Index (GGI). The results of this study demonstrate that (i) the measures of green growth performance have a positive impact on the economic development of high-income, upper-middle-income, and lower-middle-income economies, (ii) in poorer economies, less is the contribution of green growth to economic development, mainly because they neglecting the social dimension despite the numerous existing projects in these economies for greater inclusion and (iii) green economic opportunities (green investment, green trade, green employment and green innovation) do not influence green economic development in all analysed economies. Consequently, suggestions were made for policymakers from different groups of countries to increase and accelerate their sustainable green growth. Literature on economic development and green growth is still scarce, especially at the empirical level, and few studies use the 2020 GGI data. In addition, this study also uses recent rankings of world economies to categorize the economic development of countries.

Keywords: Economic development; Efficient and sustainable resource use; Green economic opportunities; Green economy; Green growth index; Natural capital protection; Social inclusion.