Do Technological Advances Promote Ecological Sustainability? Evidence from Panel Causality Analysis for the Dirtiest and Cleanest Countries

Ali Celik (), Ebru Gul Yilmaz (), Sukran Kahveci () and Gonca Yilmaz ()
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Ali Celik: Istanbul Gelisim University
Ebru Gul Yilmaz: Istanbul Gelisim University
Sukran Kahveci: Istanbul Gelisim University
Gonca Yilmaz: Istanbul Gelisim University

Journal of the Knowledge Economy, 2025, vol. 16, issue 5, No 59, 17292-17327

Abstract: Abstract As a solution to the problem of scarce resources, which stands out in the commonly accepted definition of the economy, technology assumes the role of humanity’s savior in terms of the efficient use of resources. On the other hand, much research points to the negative effects of technology, such as air pollution and climate change. The motivation of the study is to measure the net effect, considering both the negative and positive effects of technology. Does technology give more to humanity than it takes from humanity? In light of this, the primary question that will be investigated in this study is as follows: What are the effects of technology, which is one of the fundamental components of economic growth, on environmental pollution in countries that have high and low levels of pollution? This approach addresses a gap in the existing literature. To investigate the answer to this question, we use the moment quantile regression (MMQR) method proposed by Machado and Silva (2019) and panel causality tests with cross-sectional dependence and heterogeneity for the most and least carbon emitting countries. The results of the causality tests show that there is a bidirectional causality relationship between total factor productivity (TFP) and Gross Domestic Product (GDP) per capita for the most polluting countries, while there is a unidirectional causality relationship from GDP per capita to TFP for the least polluting countries. Conversely, the same structure applies to the relationship between TFP and CO2 per capita. Consequently, although there are limitations in calculating the monetary value of technology’s negative externalities, it is clear that technology has both losses and gains. It is recommended that a legal infrastructure be established by a supranational authority to prevent negative externalities such as pollution. Graphical Abstract

Keywords: Technology; Economic complexity index; Total factor productivity; CO2 per capita; MMQR; Panel causality tests (search for similar items in EconPapers)
JEL-codes: O11 O14 Q51 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s13132-024-02423-9

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