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Do technological innovations and trade openness reduce CO2 emissions? Evidence from selected middle-income countries

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Abstract

This paper examines the role of trade openness and innovation in reducing CO2 emissions in middle-income countries with the goal of improving environmental quality. The generalised method of moments (GMM) method is used to estimate the long-run association between variables and Dumitrescu-Hurlin causality test is used to examine causality for a panel of 23 middle-income countries from 1994 to 2018. The findings refute the existence of an inverted u-shape relationship between innovation and CO2 emissions. On the trade front, environmental deterioration is found to be relatively more severe in low middle-income countries than upper middle-income countries. Contrarily, the existence of the environment Kuznets curve (EKC) hypothesis for both country groups is also supported by the data; however, the fall in the EKC curve is insignificant for low middle-income countries. Implying that the quest to control carbon emissions has just begun in low middle-income countries and they must target a higher level of green innovation to reduce the ever-rising CO2 emissions. It is also suggested to promote economic growth through knowledge spillovers and to establish a pollution level standard for trading and manufacturing sectors which generate the most contaminated waste.

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Data availability

All the data that support the findings of the study has been amassed from the open sources and are available from corresponding author on reasonable request.

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  1. Department of Economics and Finance, Birla Institute of Technology and Science (BITS), Pilani, Rajasthan, 333031, India

    Megha Chhabra, Arun Kumar Giri & Arya Kumar

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  1. Megha Chhabra
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All authors contributed to the study conception and design. The first draft and revision of the manuscript were written by Megha, and all authors commented on previous versions of the manuscript. All authors read and approved the final manuscript.

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Appendix

Appendix

Table 6 Descriptive statistics
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Table 7 Pairwise correlation
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Table 8 Pairwise Dumitrescu-Hurlin panel causality tests (taking GDP as an independent variable)
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Table 9 Pairwise Dumitrescu-Hurlin panel causality tests (taking IN as an independent variable)
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Chhabra, M., Giri, A.K. & Kumar, A. Do technological innovations and trade openness reduce CO2 emissions? Evidence from selected middle-income countries. Environ Sci Pollut Res 29, 65723–65738 (2022). https://doi.org/10.1007/s11356-022-20434-4

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