This study aims to investigate how renewable energy adoption, digital transformation, financial inclusion and institutional quality contribute to economic growth in six Australian territories: New South Wales, Queensland, South Australia, Tasmania, Victoria and Western Australia. It seeks to clarify whether these factors, individually and collectively, foster sustainable economic development and advance progress toward key Sustainable Development Goals (SDGs).
Using annual data from 1990 to 2024, the analysis applies advanced econometric techniques, including the common correlated effects mean group, mean group and augmented mean group estimators. These methods allow for heterogeneity across regions while capturing the long-run relationships among renewable energy, digitalization, financial inclusion, institutional quality and economic growth.
Results demonstrate that renewable energy adoption has a significant positive effect on economic growth, with estimated contributions ranging between 0.246% and 1.240%. Digitalization and financial inclusion further enhance growth, contributing increases of 1.227%–2.231% and 1.025%–1.033%, respectively. The combined effects of renewable energy and digitalization improve infrastructure efficiency, reduce production costs and strengthen regional competitiveness. Financial inclusion broadens participation in the economy, ensuring more equitable growth. Institutional quality amplifies these outcomes, reinforcing long-term sustainability and resilience.
The findings suggest that policymakers should prioritize policies that expand renewable energy deployment alongside digital infrastructure and inclusive financial systems. Strengthening institutional frameworks will be crucial for maximizing the benefits of these factors, enabling Australia’s territories to achieve multiple SDGs simultaneously, particularly SDG 7 (Affordable and Clean Energy), SDG 8 (Decent Work and Economic Growth), SDG 10 (Reduced Inequalities) and SDG 11 (Sustainable Cities and Communities).
This research provides one of the first integrated assessments of how renewable energy, digitalization, financial inclusion and institutional quality jointly shape economic development within the Australian context. By offering region-specific evidence, it contributes to the broader debate on sustainable growth strategies and provides actionable insights for policymakers in both developed and developing economies.
