Global Analysis of the Relationship between Environmental Performance, Economic Development, and the Innovation Index Through the Kuznets Environmental Curve

Roberta Hoffmann Machado, Everton Anger Cavalheiro, Erico Kunde Correa, Leonardo Betemps Kontz and Jander Luis Fernandes Monks

International Journal of Economics and Finance, 2024, vol. 16, issue 11, 49

Abstract: This study investigated the interaction between GDP per capita, technological innovation, and environmental performance in 102 countries during the period from 2008 to 2022, considering the hypothesis of the Kuznets Environmental Curve (EKC) and the role of innovation. The aim was to contribute to the understanding of the complex relationships between economic growth, innovation, and environmental sustainability, highlighting the ongoing importance of innovation in achieving balanced development. By applying the traditional Kuznets curve, two significant inflection points were identified in the relationship between GDP per capita and environmental performance, revealing an inverted N-shape. However, upon introducing the innovation variable, we conducted an analysis from the perspective of the modified EKC, incorporating the Claudia Innovation Curve (CIC) and adding a more complex dynamic. According to this innovation-modified curve, two additional inflection points were identified. The first suggests that an increase in innovation, up to a certain point, may lead to a decline in environmental performance, due to the adoption of advanced technologies and increased income. However, the second point indicates a notable improvement in countries with a higher degree of innovation, highlighting the importance of policies that encourage sustainability-focused innovation.

Date: 2024
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