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The Relationship Between Digitalization, Co 2 Emissions, And Financial Development, Morgan Larick
The Relationship Between Digitalization, Co 2 Emissions, And Financial Development, Morgan Larick
Senior Honors Projects
This paper first examines the relationship between digitalization and CO 2 emissions to test the inverted U-shaped relationship predicted by the Environmental Kuznets Hypothesis. The results using the fixed effects, two-stage least squares, and generalized method of moments estimation coincide with this inverted U-shaped relationship suggesting that increases in digitalization increase CO 2 emissions up to a certain threshold of digitalization and then decrease it. An interaction term with financial development was then included in the model to determine the role that it plays in this inverted U-shaped relationship. Overall, results indicated that there is no strong evidence that financial …