ORIGINAL RESEARCH article
Front. Environ. Sci.
Sec. Environmental Economics and Management
Volume 13 - 2025 | doi: 10.3389/fenvs.2025.1705590
How Does Green Budget Revenue Policy Promote Economic Sustainable Development? Empirical Evidence from 107 Global Economies
Provisionally accepted
- Institute of finance and economics, Central University of Finance and Economics, Beijing, China
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Abstract: Most existing studies have overlooked the role of green budgeting systems in channeling government and market resources toward environmentally sustainable sectors, thereby fostering sustainable economic development. This study employs panel data from 107 global economies to examine the impact of green budget revenues on sustainable economic development and the mechanisms through which this relationship operates. The results indicate that green budget revenues significantly promote sustainable economic development across countries. In the short term, green budgeting exerts supervisory and demonstrative effects on firms’ production behavior. In the medium and long term, it enhances total factor productivity (TFP) by stimulating innovation compensation and by reshaping the allocation of traditional and green production factors, thus driving structural transformation in firms’ development models. Moreover, the positive impact of green budget revenues is stronger in non-OECD countries, as well as in economies with lower fiscal pressure or varying levels of governance capacity. This study reveals the medium- and long-term transmission mechanisms and cross-country heterogeneity of green budget policies, providing important theoretical and practical implications for governments seeking to design context-specific and targeted policy measures that jointly advance global sustainable development goals.
Keywords: Green budget, economic sustainability, Green development, Green Budget Revenue, Sustainabie development
Received: 15 Sep 2025; Accepted: 10 Oct 2025.
Copyright: © 2025 Li, Asli, Wei and Zhao. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Guoqin Zhao, bnuzgq@126.com
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