Does Globalization Promote Green Growth? Empirical Evidence from Organisation for Economic Co-operation and Development Countries

When the Sustainable Development Goals (SDGs) were adopted by the United Nations in 2015, green growth was at the center of this initiative. Although many of the SDGs’ guiding principles and objectives are intimately tied to green growth, Goals 8 and 13 are directly related to this concept. Even though there have been several empirical investigations that examined the factors affecting the green growth performance of the countries, the impact of globalization has been neglected, especially at disaggregated levels. The current investigation aims to fill a gap in the empirical literature by exploring the effects of globalization on green growth by considering its different dimensions: aggregate globalization, economic globalization, trade globalization, financial globalization, social globalization, and political globalization. Besides, the environmental policy stringency index is incorporated into models as a control variable. The sample consists of 33 OECD countries covering the period from 2010 to 2020. The two-step system GMM and the Dumitrescu-Hurlin (DH) panel non-causality test are employed to reveal the aforementioned relationship. The empirical findings show that the green growth performance of the countries is positively and significantly affected by globalization, at both aggregate and disaggregate levels. The findings provide significant policy suggestions for sustainable development purposes of the countries.