| Title | Too good to be true: The inverted U-shaped relationship between home-country digitalization and environmental performance |
|---|---|
| ID_Doc | 19524 |
| Authors | Ahmadova, G; Delgado-Márquez, BL; Pedauga, LE; Leyva-De la Hiz, D |
| Title | Too good to be true: The inverted U-shaped relationship between home-country digitalization and environmental performance |
| Year | 2022 |
| Published | |
| Abstract | Digitalization has been seen in the past as a panacea as it has been argued that higher digitalization will translate into better environmental performance. As the process of digitalization has advanced, however, some environ-mental drawbacks have been encountered and need to be addressed. We thus explore the inverted U-shaped relationship between home country digitalization and environmental performance. We hypothesize that in the first stage, home country digitalization has a positive impact on environmental performance (e.g., enhanced energy efficiency and resource management), but then it reaches a tipping point at which an excessive level of digitalization causes a "rebound effect," hence increasing the use of resources and resulting in higher pollution. Our panel data of 5015 firms from 47 countries in 10 sectors for the period 2014-2019 confirms our predictions. The panel smooth transition regression model (PSTR) confirms the moderating effect of the level of a country's institutional framework on this relationship between digital transformation and environmental performance. More particularly, our results show that countries with stronger institutional frameworks flatten the inverted U- shaped curve. |
| https://digibug.ugr.es/bitstream/10481/89907/1/ecological%20economics.pdf |
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