The nexus of research and development investment, financial development, energy use, and environmental degradation in Asian economies

This study explores the impact of research and development (R&D) investment and financial development on environmental degradation measured by carbon emissions (CO2), and energy use along with some other variables in a panel of 12 Asian economies using balanced panel data from 1997 to 2020. The empirical estimates of fully modified ordinary least squares and dynamic ordinary least squares reveal that R&D spending, financial development, and globalization lower environmental degradation by reducing CO2 emissions. In contrast, economic growth, energy use, population, and industrialization increase environmental degradation (Model 1). Moreover, economic growth, R&D spending, financial development, environmental degradation, and industrialization have a positive direct effect on energy use, whereas population and globalization have an inverse relationship with energy use (Model 2). These empirical findings recommend that the management authorities of Asian economies need to develop thoughtful action plans to achieve a balance between economic growth, financial and industrial development, and the accomplishment of sustainable development goals by reducing carbon emissions and sustaining energy consumption.