Will digital trade be friend or foe of the green economy? Unveiling the complexities of green growth

Abstract

This study employs the Autoregressive Distributed Lag (ARDL) model to examine the long-term equilibrium effects of digital trade (DT), foreign direct investment (FDI), material footprint (MT), and technological innovation (TI) on green total factor productivity (GTFP) across 52 countries from 2005 to 2021. The findings reveal a long-term equilibrium relationship among variables, with DT and TI positively contributing to GTFP growth, while MT and FDI impede it. Non-linear relationships between DT and GTFP are observed at specific quantiles. In developed countries, education enhances DT’s positive effect on GTFP, whereas in developing countries, it appears to have a negative impact. The study advocates for enhancing DT infrastructure and reducing educational inequalities to foster environmental and economic sustainability.

Keywords

• Green total factor productivity (GTFP)
• digital trade (DT)
• technology innovation (TI)
• sustainable development