 Technological progress and carbon emissions: Evidence from the European UnionHyun-Jung Nam, Doojin Ryu and Peter G. Szilagyi Global Finance Journal, 2025, vol. 67, issue C Abstract: We examine the U-shaped effect of technological progress on CO₂ emissions using digital and high-tech trade as well as R&D levels as threshold variables. By analyzing a comprehensive European Union dataset, we reveal the U-shaped effects of digital and high-tech trade and R&D investment on CO₂ emissions, suggesting that technological progress modifies the conventional Environmental Kuznets Curve. At low levels of technological progress, it reduces CO₂ emissions; however, CO₂ emissions increase again beyond a certain threshold. Institutional quality moderates this relationship, highlighting its role in shaping the environmental impact of technological progress, and mitigates the negative impact of technological progress on emissions in its advanced stages. As investors become more aware of environmental liabilities and regulations, incorporating environmental factors into financial policies and risk management becomes crucial. Our findings underscore the role of institutional quality in mitigating the adverse effects of technological progress on CO₂ emissions. Keywords: CO2 emissions; Digital trade; ESG; Institutional quality; R&D; Technological progress (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:67:y:2025:i:c:s1044028325000833 DOI: 10.1016/j.gfj.2025.101156 Access Statistics for this article Global Finance Journal is currently edited by Manuchehr Shahrokhi More articles in Global Finance Journal from Elsevier |
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