Assessing sustainable development with the forces of technological innovation, entrepreneurial activity and energy consumption: Insight from asymmetric and bootstrap causality methods

Abstract

This is a sustainable study of China amidst high carbon emissions. China has experienced tremendous increase in its economic operations and development which involve the excessive utilization of fossil fuel energy sources. This has put China in the list of nations that contribute towards global warming via carbon emission. On this note, data from China over the period 2002Q1–2019Q4 is analyzed, using multiple techniques (nonlinear autoregressive distributed lag-NARDL, fully modified ordinary least square-FMOLS, and bootstrap approach of Granger causality) for clear insight into China's sustainable development. Relevant instruments (technological innovation, entrepreneurial activities, economic growth proxied by GDP, fossil fuel energy consumption, and FDI) are used to measure China's economic and environmental performance to determine the level of sustainable development of the country. NARDL and FMOLS results reveal that technological innovation and entrepreneurial activity mitigate carbon emissions, while fossil fuels and economic growth induce China's carbon emissions. Also, findings from the bootstrap approach affirm the NARDL and FMOLS outcomes, with both two-way and one-way nexus established among the selected variables. Policies targeting the reduction of fossil fuel consumption in China despite the technological innovations and entrepreneurial activities are thus recommended.