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The role of financial deepening and green technology on carbon emissions: Evidence from major OECD economies

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  • Paramati, Sudharshan Reddy
  • Mo, Di
  • Huang, Ruixian

Abstract

This paper investigates the role of financial deepening, green technology, foreign direct investment (FDI), per capita income and trade openness on carbon emissions in a panel of 25 OECD economies. The paper uses robust panel econometric techniques and yearly data, 1991–2016. The empirical evidences from augmented mean group and group-mean estimators reveal that green technology, FDI inflows and trade openness reduce carbon emissions, while financial deepening and per capita income positively contribute. Overall, it implies that green technology, along with FDI and trade, is the major factor that helps to reduce the carbon emissions in the OECD economies.

Suggested Citation

  • Paramati, Sudharshan Reddy & Mo, Di & Huang, Ruixian, 2021. "The role of financial deepening and green technology on carbon emissions: Evidence from major OECD economies," Finance Research Letters, Elsevier, vol. 41(C).
    • Handle: RePEc:eee:finlet:v:41:y:2021:i:c:s1544612320316081
    DOI: 10.1016/j.frl.2020.101794
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    Keywords

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    JEL classification:

    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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