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Assessing the influence of green finance, renewable energy and digitization in stimulating economic expansion: Lessons from emerging economies

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  • Owusu, Samuel Mensah
  • Acheampong, Patrick

Abstract

This study investigates the determinants of economic expansion in the E7 nations—Brazil, China, India, Indonesia, Mexico, Russia, and Turkey—focusing on the interplay between carbon emissions (CEM), renewable energy consumption (REC), green finance (GFN), digitalization (DIG), and institutional quality (INQ). Using panel data spanning 1990–2020 sourced from the World Development Indicators and employing the Driscoll-Kraay standard error method for robust econometric analysis, the study provides novel insights into these factors. The findings reveal that carbon emissions significantly challenge sustainable growth, necessitating urgent environmental policy interventions. Digitalization is a major economic development catalyst, with enhanced ICT access and digital infrastructure driving productivity and innovation. Both renewable energy consumption and green finance are highlighted as pivotal in fostering environmentally sustainable economic growth by creating jobs and promoting green investments. Additionally, institutional quality plays a crucial role in shaping growth outcomes, with weak governance structures identified as impediments due to corruption and inefficiency. The study concludes with policy recommendations emphasizing the need for robust environmental policies, digital and renewable energy infrastructure investments, and strengthening institutional frameworks to ensure sustainable and inclusive growth in the E7 economies.

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  • Owusu, Samuel Mensah & Acheampong, Patrick, 2025. "Assessing the influence of green finance, renewable energy and digitization in stimulating economic expansion: Lessons from emerging economies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 212(C).
    • Handle: RePEc:eee:rensus:v:212:y:2025:i:c:s1364032125000863
    DOI: 10.1016/j.rser.2025.115413
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