“…This test is robust and performs efficiently as compared to pooled mean group, mean group, augmented mean group, and common correlated effect mean group (Danish, 2019; Li et al, 2020). This approach not only tackles heterogeneous slope coefficients, non‐stationarity (mixed order of integration too), endogeneity, and cross‐section dependence but also deals with unobserved common factors, which are significant, since ignoring unobserved common factors may provide biased estimation results (Khan, Ali, Umar, Kirikkaleli, & Jiao, 2020). The general form of CS‐ARDL is given as: where t = (∆ 2,it , t ´)´ and W it = (FD it , FDS it , GDP it , ECI it , REC it )´, that is, W is the set of explanatory variables, namely fiscal decentralization, square of fiscal decentralization, GDP, eco‐innovation, and renewable energy consumption.…”