Labor, technology, and growth as determinants of CO2 emissions: evidence from trade-intensive economies

This study evaluates the impact of labour force participation rate, advanced technology, and GDP growth on CO2 emissions in highly trade-open economies. The analysis is framed within the Environmental Kuznets Curve and Pollution Haven Hypothesis, covering the period from 1995 to 2022. To ensure robust empirical assessment, advanced panel regression techniques are employed, including Panel Ordinary Least Squares, the Generalized Method of Moments, and the Fixed Effects Model. The findings confirm that labour force participation, technological advancement, and GDP growth exert a statistically significant negative impact on CO2 emissions in highly trade-open economies. Conversely, the control variables—trade openness, foreign direct investment, per capita income, and gross national savings—demonstrate a positive and statistically significant effect on CO2 emissions. These results underscore the pivotal role of labour market dynamics, technological progress, and economic expansion in shaping environmental outcomes within highly trade-integrated economies. Policymakers in highly trade-open economies should prioritize investments in advanced technologies and labour market participation to mitigate CO2 emissions. Economic growth strategies must integrate sustainable practices to ensure environmental quality.