Towards a Resilient Agri-Industry: The Role of Knowledge and Digital Economies in Enhancing Environmental Governance

In its Sustainable Development Goal 2, the United Nations emphasises the need to ensure sustainable agriculture at all costs in the quest to end hunger and achieve food security. Particularly in developing economies that heavily rely on the agricultural sector, the knowledge and the digital economies are crucial for advancing agro-environmental sustainability schemes and creating an eco-friendly system. This study aims to examine the roles that knowledge and digital economies play in shaping the outcomes of environmental regulatory measures in the agricultural sector. The study examines this relationship for a panel of 82 developing and emerging economies spanning the period from 1994 to 2021. Employing the Two-Step System GMM and the IV-2SLS strategies, we uncover the following insights: First, environmental regulatory policies in developing countries do not contribute to reducing the levels of agricultural nitrous oxide and methane emissions. Second, the knowledge and digital economy contribute to reducing agricultural greenhouse gases when interacting with environmental regulatory policies. These results remain consistent after accounting for the income bracket. However, these countries require more developed knowledge economies and higher digital penetration rates to establish a sustainable agro-system. The findings recommend that governments strengthen environmental regulatory enforcement in developing countries while integrating a knowledge-based economy and promoting ICT diffusion to enhance agro-environmental sustainability. • Objective : This study aims to examine the moderating roles that knowledge and digital economies play in shaping the outcomes of environmental regulatory measures in the agricultural sector. • Methodology : Two-Step System GMM and the IV-2SLS strategies are adopted • Principal results : ICT diffusion enhances agro-environmental sustainability with an increasing digital penetration rate. Secondly, the knowledge economy contributes to reducing agricultural greenhouse gases when interacting with environmental regulatory policies. Third, the digital economy improves agro-environmental sustainability, in low and higher-income countries. Fourth, low-income countries require more developed knowledge economies and higher digital penetration rates to establish a sustainable agro-system. • Implications : The findings recommend governments to strengthen environmental regulatory enforcement in developing countries while integrating a knowledge-based economy and promoting ICT diffusion to enhance agro-environmental sustainability.