Tech collaboration & digital inclusion: Reshaping global trade in the age of climate policy

Abstract

The unrestrained carbon emissions emanating from international trade are ominously threatening environmental quality; however, this pressing issue remains understudied, underscoring the imperative for robust investigation and informed policy responses. In response to this imperative, the current study delves into the impact of international technological collaboration (IC) and digital inclusion (DIGI) on U.S. trade-embodied emissions. The study further assesses whether Climate Policy Stringency (CPS) alters the impact of IC and DIGI on U.S. trade-embodied emissions. Using quarterly data covering the period from 2000 to 2021, the study employs a time-varying rolling-window bootstrap (RWB) approach. The results affirm that IC and DIGI reduce U.S. trade-embodied emissions. Furthermore, moderation analysis confirms that CPS intensifies IC’s negative effect on trade-embodied emissions. Surprisingly, CPS fails to significantly moderate the DIGI-emissions linkage. To validate the findings, a robustness check is conducted using the Quantile-Quantile Regression (QQR) approach, and the results align with those obtained through the rolling-window bootstrap method. Additionally, the findings reveal an asymmetrical association between the variables under consideration. These outcomes hold crucial policy implications for U.S. policymakers. It is recommended that U.S. officials actively promote and support collaborative research and development initiatives with other nations to facilitate the exchange of environmentally sustainable technologies. Moreover, policies aimed at bolstering digital inclusion across sectors should be implemented to ensure that the benefits of technological advancements reach a broader population.