Environmental sustainability through aggregate demand behavior – Does knowledge economy have global responsibility?
Journal of Global Responsibility
ISSN: 2041-2568
Article publication date: 3 July 2023
Issue publication date: 9 April 2024
Abstract
Purpose
This study aims to consider environmental sustainability, a global challenge under the preview of sustainable development goals, highlighting the significance of knowledge economy in attaining sustainable aggregate demand behavior globally. For this purpose, 155 countries that have data available from 1995 to 2021 were selected. The purpose of selecting these countries is to test the global responsibility of the knowledge economy to attain environmental sustainability.
Design/methodology/approach
Results are estimated with the help of panel quantile regression. The empirical existence of aggregate demand-based environmental Kuznets curve (EKC) was tested using non-linear tests. Moreover, principal component analysis has been incorporated to construct the knowledge economy index.
Findings
U-shaped aggregate demand-based EKC at global level is validated. However, environmental deterioration increases with an additional escalation after US$497.945m in aggregate demand. As a determinant, the knowledge economy is reducing CO2 emissions. The knowledge economy has played a significant role in global responsibility, shifting the EKC downward and extending the CO2 reduction phase for every selected country. Further, urbanization, energy intensity, financial development and trade openness significantly deteriorate the environmental quality.
Originality/value
This study contains the empirical existence of aggregate demand-based EKC. The role of the knowledge economy is examined through an index which is calculated by using four pillars of the knowledge economy (technology, innovations, education and institutions). This study is based on a combined panel of all the countries for which the data was available.
Keywords
Acknowledgements
Conflict of Interest: All the authors hereby state that there is no conflict of interest with the content of this article, both in terms of academic and professional capacity. It is to affirm that the work is not submitted anywhere else other than this journal.
Ethical Approval: The entire research process is in line with our institutional research ethics policy. We declare that all ethical standards are met and complied with in true letter and spirit.
Informed Consent: All participants in this study volunteered themselves during the entire research process, and their consent was taken at inception.
Funding: This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.
Citation
Iqbal, M., Kalim, R., Ul-Durar, S. and Varma, A. (2024), "Environmental sustainability through aggregate demand behavior – Does knowledge economy have global responsibility?", Journal of Global Responsibility, Vol. 15 No. 2, pp. 158-178. https://doi.org/10.1108/JGR-02-2023-0018
Publisher
:Emerald Publishing Limited
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