Export product diversification and CO2 emissions: Contextual evidences from developing and developed economies.

Ascertaining cleaner production and sustainability is a major issue in the developed and developing world; income and international trade are the predominant factors behind this. This article explores the heterogeneous impacts of export product diversification, extensive margin, and intensive margins on the CO 2 emissions for developing and developed countries. To this end, the authors analyze the annual data of variables from 1971 to 2014 and employ unrestricted fixed effects and system GMM to solve the research problem. The empirics suggest that all three indicators of export diversification significantly reduce CO 2 emissions in 63 developed and developing countries as a global sample. The fixed effect models reveal that product diversification and intensive margin have a negative and significant impact in developed economies. The negative impacts of product diversification show that economic sophistication is an important tool to reduce emissions. Further, the Chow test proved the statistical difference between developed and developing economies, which contributes to policy recommendations. Based on the empirical outcomes, the study suggests innovative policies for cleaner production and industrial manufacturing purposes, making the policies more effective in achieving Sustainable Development Goals (SDGs). Image 1 • This study analyzes 63 countries as global sample for the period from 1971 to 2014. • The research work applied product diversification, intensive and extensive margin to understand the CO 2 emissions. • The paper used Chow test, Fixed effects, and system GMM to analyze the diversification-carbon nexus. • The empirical findings suggested negative impacts of product diversification on CO 2 emissions. • Product diversification, extensive, and intensive margins are strategic tools in developing and developed economies. [ABSTRACT FROM AUTHOR]