Do Green Growth and Technological Innovation Matter to Infrastructure Investment? Global Evidence: The 3rd Asia Conference on Business and Economic Studies

The notion of green growth has emerged as an international policy discourse and response to climate change and ecological breakdown, designed to improve the demand-based and production-based emissions through a nation’s investments in its technological innovations and environmental-related expenditures. Equally, infrastructure investment plays an important role in the provision of fundamental
demands and needs such as transport, utilities, communication, and energy. Thus, both ‘green growth’ and ‘infrastructure investment’ are of critical importance for achieving sustainable development goals and enhancing the social and economic productivity of any country. Recent economic simulations indicate that to safeguard reasonable levels of economic growth, the operationalisation of a wide portfolio of technologies is necessary to achieve Paris accord targets and
realise economic sustainability. It is estimated that the global investment within infrastructure requires circa $94 trillion channelled towards infrastructure investment by 2040, with the current infrastructure investment gap (deficit) equating to $15 trillion. Importantly, new ESG mandates within the investment sphere see ‘green infrastructure’ as a new approach in climate change mitigation and adaptation which can also deliver enhanced returns performance whilst meeting the green growth agenda. Consequently, this study investigates the nexus between green growth and infrastructure investment trends through a global investigation of 56 countries for the period 2000-2020. Employing data extracted from Global Infrastructure Outlook, World Bank, and OECD statistics based on the STIRPAT and IPAT frameworks, several econometric approaches including multiple regression, unit root, cross-sectional dependence, and cointegration tests are employed. The study detects long-run co-integrating relationships amongst infrastructure investment trends, green growth, and environmentally-related spending. Furthermore, the findings indicate environmentally-related taxes and R&D expenditure on green growth are critical to the investment trends for infrastructure. The findings are consistent but volatile when controlling for different factors in the sample and reveal important policy implications, country-specific insights, and directions for future research investigations.