A pathway toward future sustainability: Assessing the influence of innovation shocks on CO2 emissions in developing economies

Zhu Weimin (), Muhammad Zubair Chishti (), Abdul Rehman () and Manzoor Ahmad ()
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Zhu Weimin: Zhengzhou University

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2022, vol. 24, issue 4, No 13, 4786-4809

Abstract: Abstract The prior empirical research focuses on examining only the procyclical impact of innovation on carbon emissions (CO2e), in the majority of cases, for advanced economies. The current paper contributes to the extant literature by integrating positive and negative shocks of innovation in the model to scrutinize their potential effects on CO2e for the sample of 46 developing economies. Globalization (GLOB), renewable energy consumption (REC), fossils fuels consumption (FFC), foreign direct investment (FDI), and GDP per capita are embodied as control variables. The application of panel Fully modified ordinary least squares (PFM-LS) and panel Dynamic least squares (PD-LS) approaches exhibits the following results. First, the positive shocks of innovation disrupt the deleterious repercussions of CO2e, while the negative shocks deteriorate the environmental quality. Second, globalization and REC enhance the ecological quality by curbing CO2e. Third, FDI and FFC show the direct association with CO2e and make the pollution issue more alarming. Lastly, the impact of GDP growth also remains unfavorable, and it escalates the ratio of CO2e. The study also includes the positive and negative shocks of globalization and REC in the model to confirm its robustness. Interestingly, the impact of shocks in innovation on the ecological quality remains consistent, indicating the findings' robustness. For a sustainable future, the article’s findings suggest to adopt the innovation shocks as a policy instrument for formulating better environmental policies. Also, some study limitations are presented, which may provide some new sights for future research.

Keywords: Innovation shocks; Environmental quality; Globalization; Renewable energy; CO2e; Developing economies (search for similar items in EconPapers)
JEL-codes: O3 O31 Q54 Q55 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (12)

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DOI: 10.1007/s10668-021-01634-3

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