Synthesizing Green Growth From Dynamic Capabilities Perspectives: New Implications for Sustainable Development Policies Among G‐8 Countries

Abstract

Holistic approaches to meeting human needs while also protecting environmental resources and securing the ecological capacity needs of future generations are critical for sustainable development. Therefore, it is a strategic priority for firms to develop production and management practices that focus on sustainability at both economic and ecological levels. This study took a novel approach to extend the dynamic capabilities theory to a macroeconomic context of sustainable development. The green growth processes of G-8 countries are examined in the context of dynamic capabilities theory using annual data for the years 1990–2021. We examined how green technology investments and energy productivity levels affect green growth as a major indicator of sustainable development, while controlling for the differences in environmental policy stringency level and the amount of green energy supply. The CS-ARDL method, which is sensitive to cross-sectional dependence, was used in the study. Positive impacts of both green technology investments and energy efficiency on green growth were observed, with insignificant impacts from the duo of environmental policy stringency and the amount of green energy supply. This outcome buttresses the increasing need to not only boost the amount of investment in green technology, but also pay attention to stimulating energy productivity levels for attaining sustainable development goals (SDG-8) among the G-8 countries.