Technological Innovation and Green Growth: Evidence from South Asia
Keywords:
Green growth, CO2 emissions, South Asia, GDP, FMOLS and DOLSAbstract
Green growth through technological innovations is the need of the hour for the developing economies of South Asia. Yet these economies suffer from the continued consumption of non-renewable fuel sources, producing tons of CO2 annually. This research analyzes how green growth has been affected by technological innovation in South Asia (Bangladesh, Pakistan, India, Sri Lanka, and Nepal) during 1990 to 2019. Growth related variables such as foreign direct investments (FDI) and gross national product (GDP) are included along with access to green patents while estimation is achieved through FMOLS and DOLS model. Basic econometric tests such as Cross-section dependence test, Panel unit root tests and Wester Lund co-integration test are also applied. The findings show that patent application by residents and renewable energy consumption have negative and statistically significant impacts on CO2 emissions; GDP has positive and statistically significant effect on CO2 emissions and FDI has no effect on CO2 emissions in both the long and short run. The results suggest that governments need to promote sustainable energy related technologies and apply them in their economic functioning.
Downloads
References
Adeel Farooq, R. M., Abu Bakr, N. A., & Raji, J. O. (2018). Green field investment and environmental performance: A case of selected nine developing countries of Asia. Environmental Progress and Sustainable Energy. Retrieved from https://doi.org/10.1002/ep.12740
Bank, W. (2016). World Bank Database. Retrieved from https://data.worldbank.org/indicator/EN.ATM.CO2E.PC?locations=8S
Bank, W. (2019). World Development Indicators. Retrieved from http:/ /www.worldbank.org/data/onlinedatabases
CBS. (2021). Centraal Bureau voor de Statistiek. Retrieved from https://www.cbs.nl/en-gb/society/nature-and-environment/green-growth/economic-opportunities/indicatoren/green-patents
Chen, F., Jiang, G., & Kitila, G. M. (2021). Trade Openness and CO2 Emissions: The Heterogeneous and Mediating Effects for the Belt and Road Countries. Sustainability. Retrieved from https://doi.org/10.3390/su13041958
Economic, S. (2019). Finance Division. Retrieved from Government of Pakistan: http://www.finance.gov.pk/survey_1819.html
Erdoğan, S., Yıldırım, D. Ç., & Gedikli, A. (2019). INVESTIGATION OF CAUSALITY ANALYSIS BETWEEN ECONOMIC GROWTH AND CO2 EMISSIONS: THE CASE OF BRICS – T COUNTRIES. International Journal of Energy Economics and Policy. Retrieved from https://www.econjournals.com/index.php/ijeep/article/view/8546
Fabrizi, A., Guarini, G., & Meliciani, V. (2018). Green patents, regulatory policies and research network policies. Research Policy. Retrieved from https://www.researchgate.net/publication/323818882_Green_patents_regulatory_policies_and_research_network_policies
Ganda, F. (2019). The impact of innovation and technology investments on carbon emissions in selected organisation for economic Co-operation and development countries. Journal of Cleaner Production.
Hanif, I., Faraz Raza, S. M., Gago-de-Santos, P., & Abbas, Q. (2019). Fossil fuels, foreign direct investment, and economic growth have triggered CO2 emissions in emerging Asian economies: Some empirical evidence. Energy, 171(C), 493-501. doi:10.1016/j.energy.2019.01.011
Hao, L.-N., Umar, M., Khan, Z., & Ali, W. (2021). Green growth and low carbon emission in G7 countries: How critical the network of enviornmental taxes, renewable energy and human capital is? Science of the Total Environment. doi:10.1016/j.scitotenv.2020.141853
Haq, A. U., Jalal, M., Sindi, H. F., & Ahmed, S. (2020). Energy Scenario in South Asia: Analytical Assessment and Policy Implications. IEEE Access. doi:10.1109/ACCESS.2020.3019648
Hu, S., Zeng, G., Cao, X., Yuan, H., & Chen, B. (2021). Does Technological Innovation Promote Green Development? A Case Study of the Yangtze River Economic Belt in China. Enviroenmental Research and Public Health.
Huang, Y., Chen, X., Zhu, H., Huang, C., & Tian, Z. (2019). The Heterogeneous Effects of FDI and Foreign Trade on CO2 Emissions: Evidence from China. Hindawi: Mathematical Problems in Engineering, 14. Retrieved from https://doi.org/10.1155/2019/9612492
Intepat. (2020). Can Patents Help Save The Environment? Retrieved from https://www.intepat.com/blog/patent/green-patents-environments/
Jamal, S. (2019). Green Growth in Pakistan: A Necessary Paradigm Shift. The Asia Foundation. Retrieved from https://asiafoundation.org/2019/08/28/green-growth-in-pakistan-a-necessary-paradigm-shift/
Khan, M. K., Teng, J.-Z., Khan, M. I., & Khan, M. O. (2019). Impact of globalization, economic factors and energy consumption on. Science of the Total Environment, 688, 424-436. Retrieved from sci-hub.se/10.1016/j.scitotenv.2019.06.065
Kwon, D. S., Cho, J. H., & Sohn, S. Y. (2017). Comparison of technology efficiency for CO2 emissions reduction among European countries based on DEA with decomposed factors. Journal of Cleaner Production. Retrieved from https://www.sciencedirect.com/science/article/abs/pii/S0959652617305000
Manzoor, R., & Samad, G. (2013). The Sustainable Green Growth Perspective of Pakistan: In the Context of Environment Friendly Technologies. Pakistan Development Review.
Muhammad, B., & Khan, S. (2019). Effect of bilateral FDI, energy consumption, CO2 emission and capital on economic growth of Asia countries. Energy Reports, 5, 1305-1315. Retrieved from https://www.sciencedirect.com/science/article/pii/S2352484719302495
Pangestu, M., & Armstrong, S. (2018). Asian economic integration: The state of play. In Asain Economic Integration in an Era of Global Uncertainty . ANU Press.
Rahman, M. M., Saidi, K., & Mbarek, M. B. (2020). Economic growth in South Asia: the role of CO2 emissions, population density and trade openness. Heliyon(6). doi:10.1016/j.heliyon.2020.e03903
Sandberg, M., Klockars, K., & Wilen, K. (2019). Green growth or degrowth? Assessing the normative justifications for environmental sustainability and economic growth through critical social theory. Journal of Cleaner Production, 206, 133-141. doi:https://doi.org/10.1016/j.jclepro.2018.09.175
Sapkota, J. B. (2020). Integrating South Asia into Asia: Evidence from Trade Statistics. Munich Personal RePEc Archive (MPRA). Retrieved from https://mpra.ub.uni-muenchen.de/106097/1/MPRA_paper_106097.pdf
Su, C.-W., Naqvi, B., Shao, X.-F., Li, J.-P., & Jiao, Z. (2020). Trade and technological innovation: The catalysts for climate change and way forward for COP21. Journal of Environmental Management, 269. Retrieved from https://doi.org/10.1016/j.jenvman.2020.110774
Sun, H., Clottey, S. A., Geng, Y., Fang, K., & Amissah, J. C. (2019). Trade Openness and Carbon Emissions: Evidence from Belt and Road Countries. Sustainability, MDPI. Retrieved from https://ideas.repec.org/a/gam/jsusta/v11y2019i9p2682-d230156.html
Survey, E. (2019). Retrieved from Government of India: https://www.indiabudget.gov.in/economicsurvey/
UNCTAD. (2020). Retrieved from United Nations Conference on Trade and Development: https://unctad.org/news/investment-flows-developing-countries-asia-could-fall-45-2020
Yasmeen, H., Wang, Y., Zameer, H., & Solangi, Y. A. (2019). Decomposing factors affecting CO2 emissions in Pakistan: insights from LMDI decomposition approach. Environmental Science and Pollution Research.
Zameer, H., Yasmeen, H., Zafar, M. W., Waheed, A., & Sinha, A. (2020). Analyzing the association between innovation, economic growth, and environment: divulging the importance of FDI and trade openness in India. Environmental Science and Pollution Research.
Aitken, B. J., & Harrison, A. E. (1999). Do domestic firms benefit from direct foreign investment? Evidence from Venezuela. American economic review, 89(3), 605-618.
Albino, V., Ardito, L., Dangelico, R. M., & Petruzzelli, A. M. (2014). Understanding the development trends of low-carbon energy technologies: A patent analysis. Applied Energy, 135, 836-854.
Al-Mulali, U., Ozturk, I., & Lean, H. H. (2015). The influence of economic growth, urbanization, trade openness, financial development, and renewable energy on pollution in Europe. Natural Hazards, 79(1), 621-644.
Bai, J., & Ng, S. (2004). A PANIC attack on unit roots and cointegration. Econometrica, 72(4), 1127-1177.
Baul, T. K., Datta, D., & Alam, A. (2018). A comparative study on household level energy consumption and related emissions from renewable (biomass) and non-renewable energy sources in Bangladesh. Energy Policy, 114, 598-608.
Bhattacharya, M., Paramati, S. R., Ozturk, I., & Bhattacharya, S. (2016). The effect of renewable energy consumption on economic growth: Evidence from top 38 countries. Applied Energy, 162, 733-741.
Change, I. C. (2014). Mitigation of climate change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, 1454.
Chiu, C. L., & Chang, T. H. (2009). What proportion of renewable energy supplies is needed to initially mitigate CO2 emissions in OECD member countries? Renewable and Sustainable Energy Reviews, 13(6-7), 1669-1674.
Chiu, C. L., & Chang, T. H. (2009). What proportion of renewable energy supplies is needed to initially mitigate CO2 emissions in OECD member countries? Renewable and Sustainable Energy Reviews, 13(6-7), 1669-1674.
Dauda, L., Long, X., Mensah, C. N., & Salman, M. (2019). The effects of economic growth and innovation on CO 2 emissions in different regions. Environmental Science and Pollution Research, 26(15), 15028-15038.
Dogan, E., &Seker, F. (2016). The influence of real output, renewable and non-renewable energy, trade and financial development on carbon emissions in the top renewable energy countries. Renewable and Sustainable Energy Reviews, 60, 1074-1085.
Dong, K., Sun, R., & Hochman, G. (2017). Do natural gas and renewable energy consumption lead to less CO2 emission? Empirical evidence from a panel of BRICS countries. Energy, 141, 1466-1478.
Duarte, R., Mainar, A., & Sánchez-Chóliz, J. (2013). The role of consumption patterns, demand and technological factors on the recent evolution of CO2 emissions in a group of advanced economies. Ecological Economics, 96, 1-13.
Galende, J. (2006). Analysis of technological innovation from business economics and management. Technovation, 26(3), 300-311.
Hao, L. N., Umar, M., Khan, Z., & Ali, W. (2021). Green growth and low carbon emission in G7 countries: How critical the network of environmental taxes, renewable energy and human capital is?. Science of the Total Environment, 752, 141853.
Hoffman, A. J. (2011). Talking past each other? Cultural framing of skeptical and convinced logics in the climate change debate. Organization & Environment, 24(1), 3-33.
Im, K. S., Pesaran, M. H., & Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of econometrics, 115(1), 53-74.
Johansen, S. (1988). Statistical analysis of cointegration vectors. Journal of economic dynamics and control, 12(2-3), 231-254.
Kao, C. (1999). Spurious regression and residual-based tests for cointegration in panel data. Journal of econometrics, 90(1), 1-44.
Khan, Z., Hussain, M., Shahbaz, M., Yang, S., & Jiao, Z. (2020). Natural resource abundance, technological innovation, and human capital nexus with financial development: a case study of China. Resources Policy, 65, 101585.
Koop, G., & Poirier, D. J. (2004). Bayesian variants of some classical semiparametric regression techniques. Journal of Econometrics, 123(2), 259-282.
Lin, B., & Zhu, J. (2019). The role of renewable energy technological innovation on climate change: empirical evidence from China. Science of the Total Environment, 659, 1505-1512.
Liobikienė, G., &Butkus, M. (2019). Scale, composition, and technique effects through which the economic growth, foreign direct investment, urbanization, and trade affect greenhouse gas emissions. Renewable energy, 132, 1310-1322.
Lipsey, R. (2002). Home and host country effects of FDI ‘, NBER Working Paper No. 9293.
Mensah, C. N., Long, X., Boamah, K. B., Bediako, I. A., Dauda, L., & Salman, M. (2018). The effect of innovation on CO2 emissions of OCED countries from 1990 to 2014. Environmental Science and Pollution Research, 25(29), 29678-29698.
Mihci, H., Cagatay, S., &Koska, O. (2005). The impact of environmental stringency on the foreign direct investments of the OECD countries. Journal of Environmental Assessment Policy and Management, 7(04), 679-704.
Nosheen M, Iqbal J, Hassan SA (2019) Economic growth, financial development, and trade in nexuses of CO 2 emissions for Southeast Asia. Environ Sci Pollut Res 26(36):36274–36286.7.
Nosheen, M., Iqbal, J., & Khan, H. (2021). Analyzing the linkage among CO2 emissions, economic growth, tourism, and energy consumption in the Asian economies. Environmental Science and Pollution Research International, 1 - 13.
Orubu, C. O., & Omotor, D. G. (2011). Environmental quality and economic growth: Searching for environmental Kuznets curves for air and water pollutants in Africa. Energy Policy, 39(7), 4178-4188.
Pesaran, M. H. (2004). General diagnostic tests for cross-sectional dependence in panels. Empirical Economics, 1-38.
Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of applied econometrics, 22(2), 265-312.
Rafindadi, A. A., Muye, I. M., &Kaita, R. A. (2018). The effects of FDI and energy consumption on environmental pollution in predominantly resource-based economies of the GCC. Sustainable Energy Technologies and Assessments, 25, 126-137.
Raiser, K., Naims, H., & Bruhn, T. (2017). Corporatization of the climate? Innovation, intellectual property rights, and patents for climate change mitigation. Energy research & social science, 27, 1-8.
Shahbaz, M., Lean, H. H., & Shabbir, M. S. (2012). Environmental Kuznets curve hypothesis in Pakistan: cointegration and Granger causality. Renewable and Sustainable Energy Reviews, 16(5), 2947-2953.
Shahbaz, M., Shahzad, S. J. H., &Mahalik, M. K. (2018). Is globalization detrimental to CO2 emissions in Japan? New threshold analysis. Environmental Modeling & Assessment, 23(5), 557-568.
Wang, D. D. (2017). Do United States manufacturing companies benefit from climate change mitigation technologies? Journal of cleaner production, 161, 821-830.
Wang, D. D., Li, S., &Sueyoshi, T. (2018). Determinants of climate change mitigation technology portfolio: An empirical study of major US firms. Journal of Cleaner Production, 196, 202-215.
Wang, S., Zeng, J., & Liu, X. (2019). Examining the multiple impacts of technological progress on CO2 emissions in China: a panel quantile regression approach. Renewable and Sustainable Energy Reviews, 103, 140-150.
Westerlund, J. (2007). Testing for error correction in panel data. Oxford Bulletin of Economics and statistics, 69(6), 709-748.
Zhu, H., Duan, L., Guo, Y., & Yu, K. (2016). The effects of FDI, economic growth and energy consumption on carbon emissions in ASEAN-5: evidence from panel quantile regression. Economic Modelling, 58
