The role of ICT and financial development in CO2 emissions and economic growth

This study explores the role of the information and communication technology (ICT) and financial development (FD) in both carbon emissions and economic growth for the G7 countries for the period 1990 to 2014. Using PMG, we found that the ICT has a long-run positive effect on emissions, while FD is a weak determinant. The interactive term between the ICT and FD produces negative coefficients. Also, both the variables are found to impact negatively on economic growth. However, their interaction shows that they have mixed effect on economic growth, i.e., positive in the short run and negative in the long run. Policy implications were designed based on these results.