Impact of Economic Growth, Financial Development and Technological Advancements on Carbon Emissions: Evidence from ASEAN Countries

Abstract

This research contributes to the existing knowledge by examining the long-run and short-run effects of Financial Development, Economic Growth, and Technological advancements on carbon emissions in Association of Southeast Asian Nations countries. The Pooled Mean Group (PMG) estimation was applied in this study using a panel data analysis from 2000 to 2018. Results showed that rapid economic growth, financial development, and technological advancements increase carbon emissions. The increase in technological advances in the Information technology (IT) sector, industrial sector equipment, and high-power tools lead to increased carbon emissions. Development in finance creates the opportunity to start new industrial sector companies. The economic development base on the industrial sector has a significant positive effect on carbon emission in ASEAN countries. Furthermore, the findings support the environmental Kuznets curve, emphasizing that rapid economic growth leads to direct carbon emissions. Therefore, our conclusions manifest and underscore the importance of eradicating carbon emission policies and guidelines to minimize carbon emissions. In addition, it is recommended to increase investment in technological innovation research and development to reduce carbon emissions.