THE MODERATING ROLE OF HUMAN CAPITAL ON THE RELATIONSHIP BETWEEN GLOBALIZATION AND GREEN TECHNOLOGY ADOPTION IN EMERGING ECONOMIES

Abstract

Shifting to clean or green energy technologies is important for emerging economies that aim to separate economic growth from environmental harm. Existing research has already proved that globalization channels—such as economic, social, trade, and financial globalization—have promoted the adoption of green technology. However, a significant gap remains in understanding how a country’s internal human capital influences this international spillover. We used 22 years of yearly data from 25 emerging economies from 2000 to 2021. This paper explores whether local human capital influences the way dimensions of globalization impact the adoption of green technology across emerging economies using a two-step System GMM methodology . The empirical evidence suggests that in the case of economic, social, and trade globalization, they cannot solely impact the adoption of green technology across emerging economies. Conversely, their interaction with local human capital has a robust and significant impact on technology adoption. Among all the dimensions, only financial globalization independently facilitates the adoption of clean energy. Simultaneously, leveraging human capital significantly enhances the link between globalization and green technology, nearly doubling the adoption rate. These findings imply that, without skilled technicians and engineers, imported technologies may be underused or remain unused in warehouses. This highlights that the advantages of green technology transfer heavily rely on having a skilled workforce to implement the transition. To this finding, we propose some policy recommendations for governments in emerging economies: They should step away from the idea of trade liberalization and invest more in bringing in advanced technology, dedicated STEM education, compulsory green training contracts for their corporate employees , and upskilling of labor to overcome the mismatch in skill sets.