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The Effects of Technological Innovation, Industry Share, and  Foreign Direct Investment on Bangladesh’s Industrial Processes  and Carbon Emissions

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Saidatus Saba — Department of Economics, Netrokona University, Netrokona, Bangladesh.
Md Mehedi Hasan — Department of Economics, Netrokona University, Netrokona, Bangladesh.
Niloy Sarker — Department of Economics, Netrokona University, Netrokona, Bangladesh.
Suraiya Ajreen Ritu — Department of Economics, Netrokona University, Netrokona, Bangladesh.
Published 5 Jun 2026 Vol. 7 No. 3 (2026), pp. 1-23 ● Open access
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Abstract

This research investigates the long- and short-run impacts of technological innovation,  industry share, and Foreign Direct Investment on CO2 emissions from industrial processes in  Bangladesh. Time series data from 1986 to 2021 are analyzed using the Autoregressive  Distributed Lag (ARDL) bounds testing approach and the ECM method to examine dynamics  in the long and short run, respectively. However, both industry shares and FDI one-year  lagged values in the short run indicate the reduction of CO2 emissions from industrial  processes. The findings revealed a significant positive long-run association between CO2 emissions from industrial processes, innovation, industry share, and Foreign Direct  Investment. Thus, in the long run, the pressing concerns about increased emissions from  industrial processes call for robust policies, such as strengthening low-carbon innovation  systems, steering industrial activities and FDI towards cleaner, greener technologies, and  enhancing long-term sustainability while maintaining economic competitiveness. 

 

KeywordsCO₂ emissions, Technological innovation, Industry share, Foreign Direct Investment (FDI), ARDL, Bangladesh

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