Investigating the nexus between technological innovations and trade in low carbon technology products in BRI economies: Do environmental taxes matter?

Technological innovations, environmental taxes and low-carbon technologies are essential for transitioning to a carbon-free economy. However, the significant role of technological innovations and environmental taxes in shaping trade in low-carbon technology products still requires further investigation within the BRI context. To address this research gap, the study assessed the potential impact of technological innovations and environmental taxes on TLCTPs using panel data from 31 BRI economies spanning 1994 to 2021, utilizing the CS-ARDL, robustness and IV 2SLS methods. The findings exhibit that technological innovations significantly enhance TLCTPs. Whereas ecological taxation not just enhances trade in low carbon technology products but also reinforces the relationship between technological innovations and TLCTPs, it sustains the Porter Hypothesis. In addition, control variables, i.e., FDI, lnGDP, REC, R&D expenditures, institutional quality and human capital have substantial impacts on TLCTPs. Contrarily, CO2 emissions and dependency on non-renewable energy hamper the low carbon technology trade. Hence, study outcomes emphasize the significance of a complementary policy framework, encouraging research and development subsidies, green taxation strategies and trade liberalization to foster technological transfer, low-carbon trade and green growth in BRI economies.