Innovation technology and environmental sustainability: income is key

Fethi Amri () and Khaled Nasri ()
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Fethi Amri: University of Gabes, Higher Institute of Management of Gabes (ISG), Tunisia, Unit of research 3E “UR22ES05”
Khaled Nasri: FSEGT, University of Tunis EL Manar

Environmental Economics and Policy Studies, 2025, vol. 27, issue 4, No 10, 727-739

Abstract: Abstract This paper investigates the relationship between technological innovation and environmental sustainability in low-income countries from 1990 to 2020. Employing a panel data simultaneous equation model with the three-stage least squares (3SLS) method to address income endogeneity, our analysis reveals several key findings. First, our results reject the Environmental Kuznets Curve (EKC) hypothesis, as the analyzed countries have not yet reached the required GDP threshold for environmental sustainability. Additionally, we find no substantial evidence of technological innovation and financial development impacting either economic growth or CO2 emissions in the low-income countries under examination. Despite a positive influence on economic growth, trade, and energy consumption are observed to have a detrimental effect on environmental quality. These findings emphasize the need for policymakers to not only foster financial and technological systems but also promote the development of commercially viable technological products and increase the adoption of renewable energy sources as part of holistic strategies for environmental sustainability.

Keywords: Technological innovation; Environmental kuznets curve; CO2 emissions; Low-income countries (search for similar items in EconPapers)
JEL-codes: C33 O5 Q55 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10018-024-00432-1

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