Green investment, financial development, digitalization and economic sustainability in Vietnam: Evidence from a quantile-on-quantile regression and wavelet coherence

This study analyzes how economic sustainability in Vietnam could be promoted by realizing opportunities represented by green investment, digitalization, and financial development. The relationship between digitalization, green investment, financial development, and sustainable development has yet to be thoroughly investigated. In addition, no research has been conducted in Vietnam on the relationship between these indicators to the best of our knowledge. By doing so, we adopt a novel three-stage methodology comprising quantile-on-quantile regression developed by Sim and Zhou (2015), Granger causality in quantiles proposed by Troster (2018), and wavelet analysis. The findings demonstrate a strong positive effect of digitalization, green investment, and financial development on economic sustainability in Vietnam across most quantiles, indicating that investment in green resources, technology innovation, and financial development supports the country's transition to sustainable development. Overall, the empirical findings show that digitalization, green investment, and financial development can all play a significant role in significantly increasing the sustainability of Vietnam's current high economic growth trajectories. The findings could create a roadmap for developing countries to use technology innovation, green investment, and financial development in productive sectors to accomplish sustainable development goals.