Does interaction between technological innovation and natural resource rent impact environmental degradation in newly industrialized countries? New evidence from method of moments quantile regression

As a contribution to the technological innovation-natural resource rent-environment literature, this study examines the technological innovation and natural resource rent in an environmental Kuznets curve (EKC) multivariate framework. We employed reliable, robust, and efficient novel panel estimations methods on a sample of 10 newly industrialized countries (NICs) over the periods 1990 and 2018. To achieve our study objective, we employ the method of moments quantile regression (MMQR) approach to analyze the effects of the exogenous variables over the range of diverse quantiles of carbon emissions. Results generated from the MMQR mimic that of the three heterogeneous linear panel estimations (fully modified ordinary least square, the dynamic ordinary least square, and the fixed effects ordinary least square) in terms of the sign and magnitude. The result affirms the existence of the environmental Kuznets curve (EKC) hypothesis in NICs across all quantiles (0.1-0.95). In addition, technological innovation and renewable energy consumption improve environmental quality in NICs across quantiles (0.1-0.95), while the joint impact of technological and natural resource rent mitigates environmental degradation from lower to higher quantiles (0.1-0.90). Moreover, technological innovation is found to exert an indirect favorable impact on the environment through the pathway of natural resources. Thus, technological innovation can be anticipated to enhance sustainable natural resources exploration in the NICs. In line with these crucial outcomes, this research proposes that the NICs should promote technological innovation, promote sustainable natural resource exploitation, and expedite economic expansion rates via the sustainable transformation of their production and consumption processes.

Automated summary

This study examines the impact of technological innovation and natural resource rent on environmental quality in NICs within an environmental Kuznets curve framework. The results suggest that technological innovation and renewable energy consumption help improve environmental quality, while the joint impact of technological and natural resource rent mitigate environmental degradation.