The effects of technological innovation on sustainable development and environmental degradation: Evidence from China

Despite the rapid progress of the global economy and technology's key role, severe environmental and ecological challenges must be given proper attention to advance sustainable development. This paper uses the autoregressive distributed lag method on 40 years of data to investigate the impact of technological innovation on China's sustainable development and determine the channels through which technological innovation contributes to sustainable development. Our empirical results demonstrate that technological innovation is an important driver in promoting sustainable development, revealing that innovation adds to economic growth without harmful effects on the environment. The results also indicate that financial development significantly adds to China's sustainable development through carbon dioxide (CO₂) emissions reduction, and economic growth further triggers the sustainability process by reducing CO₂ emissions. The findings of this paper enhance existing theories and contribute to the progress of sustainable development in China, the novel results outlining industry development drivers could potentially be used for developing global innovation policies integration.