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

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.

Automated summary

The study shows that in OECD economies, green technology, FDI, and trade openness can reduce carbon emissions, while financial deepening and per capita income contribute to an increase in carbon emissions.