Investigating the role of financial development and technology innovation in climate change: evidence from emerging seven countries

Figures & data

Table 1. Detail and Justification of variables.

Variable name	Variable Nature	Unit of measurement	Justification of Variables
Carbon Emissions (CO2_EMS)	Dependent Variable	Metric tons per capita	(Chen & Lei, 2018; Godil et al., 2020; Shahbaz et al., 2013; Shoaib et al., 2020; Tamazian et al., 2009)
Financial Development (F_DV)	Independent Variable	Domestic credit provided by financial sector (% of GDP)	(Chen & Lei, 2018; Godil et al., 2020; Law et al., 2018; Shoaib et al., 2020; Zameer et al., 2020)
Technology Innovation (TEC_INV)	Moderating Variable	Total patent applications	(Bottazzi & Peri, 2003; Chen & Lei, 2018; Law et al., 2018; Tebaldi & Elmslie, 2013; Weina et al., 2016)
Economic Growth (ECO_GRW)	Control Variable	GDP per capita growth (annual %)	(Godil et al., 2020; Shoaib et al., 2020; Tamazian et al., 2009)
Industrialization (IND)	Control Variable	Industry share as a % of GDP	(Majeed & Tauqir, 2020; Tamazian et al., 2009; Xu & Lin, 2015)
Trade Openness (TOP)	Control Variable	Import + export (% of GDP)	(Fang et al., 2020; Law et al., 2018; Shahbaz et al., 2013; Zameer et al., 2020)
Urbanization (URB)	Control Variable	% of total population	(Fang et al., 2020; Majeed & Tauqir, 2020)
Population (POP)	Control Variable	Population growth (annual %)	(Bottazzi & Peri, 2003; Chen & Lei, 2018; Shahbaz et al., 2018)

Source: Author calculation.

Table 2. Descriptive statistics.

Variable	Observation	Mean value	Standard deviation	Minimum value	Maximum value
CO2_EMS	287	4.4593	5.3754	0.4492	26.8992
F_DV	287	57.9923	38.0213	8.8214	212.9187
TEC_INV	287	44811.02	190672.4	5.000	1393815
ECO_GRW	287	2.6929	4.8066	−14.5684	13.6383
TOP	287	41.1145	17.2429	12.0086	110.5771
IND	287	32.3867	9.2353	11.3991	48.0607
POP	287	1.2940	0.6806	−0.4600	2.3974
URB	287	56.7065	20.6771	19.3580	87.0730

Note: The Table 2 reports descriptive statistics summary based on overall dataset of E7 countries. The dependent variable is carbon dioxide emissions (CO2_EMS). The independent variable is financial development (F_DV), the moderating variable used in the study is technology innovation (TEC_INV), and the control variables are economic growth (ECO_GRW), trade openness (TOP), industrialization (IND), population (POP) and urbanization (URB).

Source: Author calculation.

Table 3. Correlation matrix.

	CO2_EMS	F_DV	TEC_INV	FDV* TEC_INV	ECO_GRW	TOP	IND	POP	URB
CO2_EMS	1
F_DV	0.090	1
TEC_INV	−0.141**	0.590***	1
FDV* TEC_INV	−0.103*	0.580***	0.597***	1
ECO_GRW	−0.370***	0.220***	0.143**	0.143**	1
TOP	−0.200***	−0.050	0.009	−0.004	−0.044	1
IND	0.308***	0.040	0.203***	0.182***	0.214***	0.371***	1
POP	0.620***	−0.270***	−0.279***	−0.243***	0.025	−0.384***	−0.260***	1
URB	0.394***	0.110*	0.003	−0.002	−0.448***	0.185***	−0.425***	−0.339***	1

Note: CO2_EMS = carbon dioxide emissions, F_DV = financial development, TEC_INV = technology innovation, FDV* TEC_INV = product of financial development and technology innovation, ECO_GRW = economic growth, TOP = trade openness, IND = industrialization, POP = population, and URB = urbanization. The p-values shown in parentheses, that is, ***, **, and * denotes significance at 1%, 5% and 10% levels, respectively.

Source: Author calculation.

Table 4. Heteroskedasticity test result.

Breusch-Pagan/Cook-Weisberg test for heteroskedasticity

Ho: Constant variance

Variables: fitted values of CO2

chi2(1) = 160.44

Prob > chi2 = 0.0000

Source: Author calculation.

Table 5. GMM results.

Variables	Coefficients	Standard errors
F_DV	0.010***	(0.00203)
TEC_INV	−0.032***	(0.00003)
F_DV* TEC_INV	−0.016***	(0.00001)
ECO_GRW	−0.060***	(0.00977)
TOP	−0.0306***	(0.00356)
IND	0.3945***	(0.01115)
POP	2.6534***	(0.17992)
URB	0.1732***	(0.00998)
Constant	−21.071***	(0.75331)
AR(1)	0.803
AR(2)	0.882
Sargan Test	1.000
Prob(F-stat.)	0.000
Countries	07
Observation	287

Note: CO2_EMS = carbon dioxide emissions, F_DV = financial development, TEC_INV = technology innovation, FDV* TEC_INV = product of financial development and technology innovation, ECO_GRW = economic growth, TOP = trade openness, IND = industrialization, POP = population, and URB = urbanization. The tests for serial autocorrelation denoted as AR1 and AR2. The Sargan test identifying that the instrument are healthier in estimating the dynamic model. The p-values shown in parentheses, that is, ***, **, and * denotes significance at 1%, 5% and 10% levels, respectively.

Source: Author calculation.

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