Iranian Journal of Trade Studies

Iranian Journal of Trade Studies

Studying the Impact of Green Industrial Policies on theSustainability of the Industrial Sector

Document Type : Regular Papers

Authors
Rezvan Aghamirzaei 1
Mohsen Mehrara 2
Yazdan Gudarzi Farahani 3
1 Department of Economics, Faculty of Social and Behavioral Sciences, Kish International Campus, University of Tehran, Hormozgan, Iran
2 Faculty of Economics, Tehran University, Tehran, Iran (Corresponding Author)
3 Faculty of Economics, Tehran University, Tehran, Iran
10.22034/ijts.2026.2087211.4256
Abstract
Recent literature on economics and sustainable development increasingly emphasizes the importance of directing innovation pathways toward the transition to a green economy. The intensification of environmental challenges in recent decades has highlighted the role of governments in structural transformation and has led to the emergence of a new generation of industrial policies. These policies aim not only to support production but also to promote technological transformation, enhance productivity, and guide economies toward sustainable development pathways. Acemoglu et al. (2019) argue that, in the absence of policy interventions, economies may become locked into polluting technologies due to path dependence. Similarly, Aghion et al. (2019) demonstrate that industrial policies can simultaneously promote economic growth and environmental protection through the stimulation of green innovation. Therefore, this study empirically investigates whether green industrial policies can create synergies between economic objectives and environmental sustainability. Using annual panel data from 2000 to 2024 for 32 developed and 30 developing countries, including Iran, obtained from the World Bank database (WDI), this study estimates a dynamic threshold panel model based on Hansen’s (1999) framework and its subsequent extensions. The stationarity of variables is examined using the Im, Pesaran, and Shin (IPS) unit root test, while the existence of long-run relationships is assessed through the Pedroni panel cointegration test. Threshold determination, regime number tests, optimal threshold estimation, and diagnostic tests are also conducted. In the model, industrial CO₂ emissions are considered an indicator of sustainable industrial development, and the effects of renewable energy consumption, patent protection, research and development (R&D) expenditures, and high-tech exports are evaluated. The findings indicate that renewable energy consumption has a nonlinear effect on industrial sustainability, with threshold values estimated at 11.2% for developing countries and 6% for developed countries. Moreover, renewable energy consumption, high-tech exports, R&D expenditures, and patents have negative effects on industrial CO₂ emissions, while carbon emission intensity and energy consumption intensity positively affect pollution growth. The estimated error correction coefficient confirms an appropriate adjustment mechanism toward long-run equilibrium.
Keywords
Green Industrial Policy
Sustainable Development
Industrial Sector
Dynamic Threshold Panel Data Model
Subjects
 
 
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  • Receive Date 19 April 2026
  • Revise Date 27 July 2026
  • Accept Date 28 July 2026