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

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  • Tinghui Zhang
  • Chang Hwan Choi

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.

Suggested Citation

  • Tinghui Zhang & Chang Hwan Choi, 2025. "Will digital trade be friend or foe of the green economy? Unveiling the complexities of green growth," Journal of Applied Economics, Taylor & Francis Journals, vol. 28(1), pages 2464591-246, December.
  • Handle: RePEc:taf:recsxx:v:28:y:2025:i:1:p:2464591
    DOI: 10.1080/15140326.2025.2464591
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    Cited by:

    1. Ma, Huilian & Kang, Chengwen, 2025. "The impact of U.S.-style digital trade rules on digital services trade between China and CPTPP member countries," Technology in Society, Elsevier, vol. 83(C).
    2. Gong, Qi & Kong, Zhaoyang & Li, Liang & Dong, Xiucheng & Li, Yang, 2026. "The consequences of hypocrisy: how ESG greenwashing undermines green total factor productivity," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 106(C).
    3. Farah Durani & Ali Abbas & Cuihua Xie & Kay Hooi Keoy & Qasim Raza Syed & Ahsan Anwar, 2025. "Exploring the key role of education in achieving green growth: evidence from group of seven countries," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-11, December.
    4. Zhuo Chen & Chang Hwan Choi, 2025. "Impact of Free Trade Zones on Chinaʼs ICT Products Trade: A PSM‐DID Analysis," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 12(3), September.
    5. Haoyi Huang & Chunjiao Yu, 2026. "The Silk Road e-commerce cooperation initiative and the digital value-added trade between China and the BRI participating countries," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 13(1), pages 1-18, December.

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