The Impacts Of Entrepreneurship And Eco-innovation On Carbon Dioxide Emissions: Evidence From Sub-saharan Africa

Human activities escalate environmental unsustainability globally,and sustainable activities and development of technologies have been continuously carried out to address the environmental issues.There is an emergency to tackle these environmental problems in order to achieve sustainable development objectives.Due to many benefits that entrepreneurship and ecoinnovation could provide in the transition to a sustainable economy,countries in Sub-Saharan Africa are continuously strengthening their environmental policies and other institutions regulations to ensure the development of clean or green products and sustainable business practices.Consequently,there has been growing interest of environmentalists,economic actors,individuals and organization as well as government recently on the impact of entrepreneurship and eco-innovation on environmental sustainability.Numerous studies have been conducted to examine whether there is a relationship between entrepreneurship and innovation on environmental pollution from different perspectives.However,only few scholars have provided substantial linkages between entrepreneurship,eco-innovation and environmental sustainability.This research aims as assessing the impact of entrepreneurship and eco-innovation on carbon dioxide emissions in Sub-Saharan Africa countries.Four objectives were established for this study: the first objective examines the role of entrepreneurship on carbon dioxide emissions.The second objective is to evaluate the role of eco-innovation on carbon dioxide emissions,the third objective is to ascertain the interactive role of entrepreneurship and eco-innovation on carbon dioxide emissions and the fourth objective is to investigate the mediation mechanism for entrepreneurship and eco-innovation on carbon dioxide emissions.We used econometric approaches for the estimations related to the three research objectives in which models and constructs were developed considering the Environmental Kuznets Curve hypothesis,Schumpeter theory of economic development,neo-institutional theory and ecological modernization theory.This study therefore eliminated the heterogeneity and cross-sectional dependence issues,inherent with panel data analysis through the application of heterogeneous econometric approaches such as,Pooled Mean Group(PMG)and Augmented Mean Group(AMG),Pooled Ordinary Least Square(POLS),fixed effect(FE)and random Effect as the estimation approaches together with the Dumetriscu-Hurlin approach to causality test.To check for robustness of the econometric methods,the study further used Mean Group Fully Modified Ordinary Least Square(MGFMOLS),the Common Correlated Mean Group(CCEMG)and the Two-Stage Least Squares(TSLS).For the endogeneity test,the study employed the Two-Stage Least Square(TSLS).These panel econometric approaches are more robust and therefore,provide better statistical inferences in the presence of cross-sectional dependence and/or heterogeneity.Nevertheless,we group the panel of Sub-Saharan African countries into sub-panels(low-income countries and middle incomes countries)in order to explore the heterogeneous behaviour of study variables regarding the long-run relationships as well as causal connections.Our findings of the study are therefore detailed as follows;Firstly,we examined the role of entrepreneurship on carbon dioxide emissions.We employed the PMG long-run estimations which was supported by the MG-FMOLS for our investigation.Besides,we divided Sub-Saharan Africa countries into two group low-income and middle-income countries.The PMG estimations revealed that,entrepreneurship facilitates the reduction of environmental problems in the Sub-Saharan Africa countries,low-income countries and middle-income sub-groups,thus,constitutes a pathway to environmental sustainability in the sub-region.In addition,the Environmental Kuznets Curve is valid only in the middle-income countries group.Also,financial development effect was insignificant to explain the rise of pollution in the Sub-Saharan African countries,however,human development and trade openness were contributing to the increase of carbon dioxide emissions in the region as a whole.Secondly,we investigated the impact of eco-innovation on carbon dioxide emissions was scrutinized using the AMG and CCEMG approaches.Further,Sub-Saharan Africa countries were divided into low-income and middle-income countries.Findings showed that,eco-innovation mitigates environmental pollution,as a result could support environmental sustainability in SubSaharan Africa countries.In addition,income significant increases carbon dioxide emissions in Sub-Saharan Africa but the impact is statistically insignificant low-income countries and middleincome countries.Besides,urbanization reduces environmental pollution in the middle-income countries and Sub-Saharan Africa countries panels but not in the low-income countries.In addition,foreign direct investment decreases carbon dioxide emissions in the low-income countries and middle-income countries while its impact is insignificant in SSA;trade openness contributes to environmental pollution in the LIC and SSA but having no effect in MIC.Thirdly,we ascertained the interactive role of entrepreneurship and eco-innovation on carbon dioxide emissions.We used the POLS,FE,RE and TSLS for as our econometric approaches.After checking the appropriateness of the various estimation methods using Hausman test and Lagrange Multiplier,FE was the appropriate estimation method.The results indicated that,the interaction of entrepreneurship and eco-innovation leads to an increase in environmental unsustainability in MIC and SSA but the effect is not significant the LIC.Entrepreneurship had a negative impact on carbon dioxide emissions in LIC,MIC and SSA.However,eco-innovation has a significantly positive impact on environmental pollution in MIC and SSA but not in LIC.Besides,income,population and energy intensity were exerting a substantially positive effect on environmental degradation in all the groups.Fourthly,we investigated the mediation mechanism for entrepreneurship and ecoinnovation on carbon dioxide emissions.We conducted the PMG long-run estimations which was test for robustness using the TSLS for our investigation.In addition,Sub-Saharan Africa countries were equally grouped into Sub-Saharan Africa aggregated panels,low-income and middle-income countries.The PMG estimations results revealed that,industrial structure as a mediating mechanism contributes in the improvement of environmental quality in LIC panel but escalated carbon dioxide emissions in SSA.However,the effect is positive but not significant in MIC.More so,entrepreneurship mitigates environmental problems in the Sub-Saharan Africa countries and low-income countries sub-group but rather increases pollution in the middle-income sub-group.In addition,eco-innovation has a significantly positive effect on carbon dioxide emissions in SSA,LIC and MIC.Overall,with the mediating mechanism,entrepreneurship reduce carbon dioxide emissions in SSA while eco-innovation escalate pollution in the region.Also,financial development effect was significantly negative to explain the increase of pollution,however,income,human development and trade openness were contributing to the increase of carbon dioxide emissions in the region as a whole.The innovation of this research is as follows: theoretically,our study incorporates entrepreneurship in the Environmental Kuznets Curve(EKC)to examine the impact of entrepreneurship on carbon dioxide emissions.This postulates that,entrepreneurial activities firstly upsurge economic development and this would increase pollution due to limited innovation capabilities and access to clean products.With the increased adoption of sustainable products,entrepreneurship would reduce emissions.In addition,the study evaluated eco-innovation in the region and indicated that,with the appropriate innovation activities implemented,Sub-Saharan African countries could solve one of the main problems encountered by the population,that is,electricity outage and infant mortality caused by air pollution from fossil fuels electricity generation systems.Again,eco-innovation would be seen as pollution mitigation solutions.Besides,the interactive effect of entrepreneurship and eco-innovation and the mediation mechanism portray that,the theoretical mainstream could be viable regionally but not within countries as the industrialisation and economic transformation with sustainable or low-carbon orientation varies between income group,and this could contribute to the ecological modernization theory,Schumpeter theory of economic growth and institutional theories which are most often limited to developing countries with high resource capabilities.Methodologically,this study used econometric approaches considering the heterogeneity slope and cross-section dependence among variables,and the most accurate model estimation methods,that is,the PMG,MG-FMOLS,AMG,CCEMG,FE,TSLS as well as the Dumetriscu-Hurlin causality approach.These approaches provide accurate and feasible findings appropriate to develop strong policies.Entrepreneurship and eco-innovation are centered on the development and promotion of technologies and products that mitigate emissions,create value and improve economic development.Consequently,entrepreneurship and eco-innovation constitute a path towards a circular or sustainable economy.