The future of green transportation: evaluating the impact of innovation in hybrid electric vehicles relating technologies on carbon dioxide emissions in Asia's top knowledge-based economies

The significant contribution of the transportation sector to carbon dioxide emissions (CO₂e) has become a developing concern for legislators and environmental experts. Innovation in hybrid electric vehicle-related technologies (IHVRTs) has been identified as a possible strategy for reducing CO₂e in the transportation industry. Even though IHVRTs have the potential to reduce CO₂e, there are insufficient studies on their impact in the top three Asian knowledge-based economies (Japan, South Korea, and Japan). This study attempts to address this gap in the literature by investigating the association between innovation in IHVRTs and CO₂e in the top three Asian knowledge-based economies, with independent variables gross domestic product per capita (GDPPC), economic complexity (ECC), renewable energy consumption (RNEC), and financial development (FD). The model's coefficients are estimated using the augmented mean group, which considers cross-country dependencies and country-specific effects. The empirical findings indicate that IHVRTs have a substantial negative effect on CO₂e. In addition, FD has a favorable relationship with CO₂e, whereas ECC has a negative relationship with CO₂e. The results also demonstrated that RNEC reduces CO₂e, whereas the GDPPC reduces CO₂e. The policy implications of the results imply an urgent need for additional investment in IHVRTs and a transition towards more environmentally conscious and less ecologically damaging economic activity.