Effects of Economic Openness, Innovation and New Technologies on the Environment: A Study of Developing and Developed Countries

Document Type : Research Paper

Authors

1 Associate Prof, Department of Economics, Payame Noor University(PNU),Tehran, Iran

2 Assistant Professor, Department of Economics, Payame Noor University, Tehran, Iran

3 Assistant Prof, Department of Economics, Payame Noor University(PNU), Tehran, Iran

4 Department of Economics, Payame Noor University(PNU),Tehran, Iran

10.30473/ee.2024.70297.2705

Abstract

In this research, the effects of economic openness, innovation, and new technologies on the environment in 32 developing and developed countries from 1997 to 2022 were investigated and measured based on the panel autoregressive distributed lag model (Panel ARDL). The results of this study show that in developing countries, the variables of gross domestic product (GDP) growth and the square of GDP growth have a positive effect on carbon dioxide emissions, indicating a rejection of the Environmental Kuznets Curve (EKC) hypothesis for these countries. In contrast, the results obtained from the model estimation for developed countries show that the square of GDP growth has a negative and significant effect on carbon dioxide emissions, confirming the EKC hypothesis for developed countries. Moreover, the findings for developing countries reveal that the impact of foreign trade volume relative to GDP, along with innovation and technology, has a negative and significant effect on carbon dioxide emissions. In contrast, for developed countries, the effect of foreign trade volume (sum of exports and imports) relative to GDP has a positive and significant impact on carbon dioxide emissions. The results of the error correction coefficient for developing countries indicate a significant long-term relationship between the model variables. A shock to the carbon dioxide emissions variable in the short term will persist for approximately two periods, after which the short-term relationship will converge toward the long-term equilibrium path. Meanwhile, the error correction coefficient for developed countries also confirms a significant long-term relationship between the model variables. As expected, in each period, about 0.42 units of the deviation from the long-term path will be corrected. This coefficient reflects a slow adjustment speed toward the long-term equilibrium for developed countries. Accordingly, the effect of a shock on carbon dioxide emissions in developed countries will persist for a short period of approximately four time periods. Supportive financial and fiscal incentives for the development and adoption of clean and sustainable technologies are recommended to reduce environmental pollution.

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References

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Journals of Environmental Education and Sustainable Development
Volume 13, Issue 3
2025
Pages 157-170

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