Abstract
This study analyzes the relationships and dynamics between material production, foreign direct investment (FDI), economic activity, carbon productivity, the stock market, and green tech, both in a global and European context, using panel vector autoregressive methodology (PVAR). The empirical evidence obtained for the Global Group reveals four significant and positive unidirectional causality relationships, where aggregate material production is the prominent variable. For the EU-15 group, six significant causality relationships were detected, among them three negative and three positive unidirectional relationships. The stock markets shock reveals to be the most dominant variable, despite FDI standing out as causing the greatest shock effect. Nevertheless, in the European context, limited evidence of dematerialization is detected. Economic recessions show a generally negative effect, which contrasts with the economic Kitchin cycles, which reveal the effect of a generally positive relationship.
Highlights
The current scenario of global warming has led world institutions and political decision-makers to join various international discussion forums on mitigation strategies and the implementation of policies and measures to fight pollution and, generally, to adopt clean energy sources
No hypothesis is formulated, the results show a positive relationship between green tech and aggregate material production in the context of Global Group, which appoints for as it ramps up CO2 emissions higher probability that a country develops an environmental-related technology (Su and Moaniba 2017)
Considering the empirical findings, concerning the Global Group, material production is found to be the predominant factor in the positive determination of the behavior of Foreign Direct Investment (FDI), economic activity and green tech
Summary
The current scenario of global warming has led world institutions and political decision-makers to join various international discussion forums on mitigation strategies and the implementation of policies and measures to fight pollution and, generally, to adopt clean energy sources. These efforts have had a limited effect on the co-evolution of economic and population growth trajectories, resulting in an increasing demand for, and use of, natural resources and higher greenhouse gas emissions. It serves to define a reduction in the intensity of raw material in economic activity (Bernardini and Galli 1993) or relative or absolute reduction of the amount of material and waste generated per production unit in the economy (Cleveland and Ruth 1998)
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