Technological Innovation, Economic Freedom and Environmental Degradation: New Evidence from Time-Varying Causality Analysis in Viet Nam

Nguyen Thi Quy () and Ha Thi Thieu Dao ()
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Nguyen Thi Quy: University of Economics and Law, VNU - HCM, Vietnam; & University of Finance - Marketing, Ho Chi Minh City, Vietnam
Ha Thi Thieu Dao: Ho Chi Minh Banking University, Ho Chi Minh City, Vietnam

International Journal of Energy Economics and Policy, 2025, vol. 15, issue 5, 188-195

Abstract: Environmental degradation is one of the most serious issues in recent decades, making studying its impact on the economy imperative. Using a novel time-varying Granger causality approach, we examine the causal relationships between real GDP per capita, technological innovation, economic freedom, and trade openness about environmental degradation (measured through carbon dioxide emissions) in Vietnam from 1990 to 2023. The results indicate a significant causal relationship between technological innovation and the control variable of real GDP per capita to emissions throughout the study period. The direct causal relationship between economic freedom and emissions is minimal; however, when economic freedom is combined with technological innovation, a clear causal relationship with emissions emerges. These findings suggest that investment in green technology can improve the state of environmental degradation in Vietnam. Additionally, economic freedom will transfer green technology from developed countries to Vietnam, contributing to a better environment. On the other hand, ensuring that the growth process is linked to sustainable increases in macroeconomic factors is essential to mitigate the adverse effects of real GDP per capita on the environment.

Keywords: Technological Innovation; Economic Freedom; Environmental Degradation; Time-Varying Causality; Viet Nam (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:v:15:y:2025:i:5:id:19955

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DOI: 10.32479/ijeep.19955

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