Capital stock, energy, and innovation-related aspects as drivers of environmental quality in high-tech investing economies

Abstract

By looking at the technological advancement and climate change mitigation plan of the advanced economies, the current study examines the role of sustainable development aspects such as innovations, high technology export, labor productivity, capital stock, research and development (R&D), information and communication technology (ICT), capital stock, and energy use in mitigating environmental degradation for the selected panel of countries with the most investment in technology (China, Denmark, Finland, France, Israel, Korea, Hong Kong, Germany, Japan, Netherlands, Singapore, Sweden, United Kingdom, and United States) over the period 2000–2018. Foremost, the pooled ordinary least square (POLS) and random-effects (RE) generalized least squares (GLS) approaches provided additional interesting inferences. As such, the POLS result revealed that only capital stock in the panel countries shows a desirable environmental effect. At the same time, labor productivity, innovation, R&D, ICT, and energy further hamper ecological quality in the examined panel countries. Similarly, the GLS result largely affirms the POLS results, with only the capital stock among the explanatory variables showing evidence of emission mitigation effect in the panel. Additionally, the panel Granger causality result illustrates evidence of unidirectional causality only innovation, ICT, and capital stock to environmental degradation.