Green Growth and Sustainable Development: Managing Geopolitical Risks and Resource Dependency Through Innovation and Governance in a Subset of E7 Economies

This study investigates the environmental, institutional, political, and economic drivers of green innovation intensity in the E7 countries from 2000 to 2021, with a focus on how innovation, governance, and energy transition can mitigate structural challenges. The analysis employs the Cross‐Sectional Autoregressive Distributed Lag model to assess both short‐run dynamics and long‐run relationships among renewable energy adoption, institutional quality, environmental innovation, human capital, geopolitical risks, and natural resource dependency. The findings show that renewable energy use, environmental innovation, and strong institutional frameworks play a critical role in promoting green innovation intensity. In contrast, heavy reliance on natural resources and heightened geopolitical risks significantly hinder environmental and economic progress. Human capital exerts a supportive role when aligned with sustainability‐oriented policies, while weak governance and instability magnify the negative impacts of resource dependence. Robustness checks using Augmented Mean Group and Common Correlated Effects Mean Group estimators confirm the consistency of these results. The study highlights the policy urgency for E7 countries to strengthen environmental governance, diversify energy portfolios toward renewable sources, foster innovation, and reduce exposure to geopolitical vulnerabilities. By addressing these challenges, governments can align economic development with environmental sustainability and accelerate progress toward the United Nations Sustainable Development Goals, particularly those related to responsible resource use, institutional effectiveness, and climate action.