Assessing Environmental Impacts of ICT integration in Asian Economies

Abstract

Objective: This study is intended to explore how integration of ICT with increment in production level alters the environmental quality of a region.

Secondly how the three income groups of Asia region are able to maintain their environmental quality and achieve sustainable development by the adoption of ICT.

Research Gap: No such study exists in literature which identifies the validity of  EKC hypothesis in three income groups of Asia by incorporating Variable of ICT and makes comparison of the effects of ICT penetration in three income groups of Asia.

Design/Methodology/Approach: The impact is analyzed for three Asian income groups i.e., lower, middle and higher. Impact of digitization is captured by constructing ICT index using four variables as its proxies i.e., Internet users (IU), mobile cellular subscribed (MCS), fixed broad band subscribed (FBS) and fixed telephone lines subscribed (FTS). The study uses the data for the period of 1990-2016 due to the limitation of data availability of CO₂ which is dependent variable of the study and depicts the quality of environment and hence sustainability. Panel time series estimation procedure is followed by application of second-generation tests such as cross-sectional dependent test (Pesaran CD, Pesaran scaled LM and Breusch Pagan LM test), second-generation unit root tests (CADF and CIPS) test and Westerlund cointegration test.

Findings: This study evidences the existence of EKC hypothesis in middle and high-income groups of Asia, whereas it favors rejection of the theory in low-income countries. Impacts of digitization on environmental quality are diversified. It reduces carbon emissions and significantly improves environmental in low and middle-income countries of Asia. However, it intensifies carbon emissions level in high-income Asian countries. Policies are suggested in the relevant chapter of the study accordingly.

Theoretical / Practical Implications of the Findings: findings of the study can be helpful to formulate policies to improve environmental quality while considering the impact of economic growth and ICT adoption.

Originality value:

The study employees the model with self-created ICT index incorporated in EKC frame work along with control variables chosen from literature.