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The nexus of carbon emissions, oil price volatility, and human capital efficiency

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  • Umar, Muhammad
  • Mirza, Nawazish
  • Hasnaoui, Jamila Abaidi
  • Rochoń, Małgorzata Porada

Abstract

The corporate sector's active engagement is vital for achieving a net-zero future. It entails a sizeable investment in human capital to foster more conscious efforts to limit carbon emissions. Therefore it is critical to evaluate the nexus between carbon emissions and human capital efficiency. This paper analyzes the link between human capital efficiency and carbon emissions using a comprehensive sample of 5740 firms across eight countries spanning over ten years. Our findings show a negative relationship between investment in human capital and carbon emissions. We emphasize that optimal human capital efficiency can help limit emissions by fostering the transitions to renewable energy sources and the development of cognitive appreciation. The results remained robust for periods marked by booming and receding oil prices. These findings have important implications for optimizing firm performance while preserving sustainable development goals.

Suggested Citation

  • Umar, Muhammad & Mirza, Nawazish & Hasnaoui, Jamila Abaidi & Rochoń, Małgorzata Porada, 2022. "The nexus of carbon emissions, oil price volatility, and human capital efficiency," Resources Policy, Elsevier, vol. 78(C).
    • Handle: RePEc:eee:jrpoli:v:78:y:2022:i:c:s030142072200321x
    DOI: 10.1016/j.resourpol.2022.102876
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    More about this item

    Keywords

    Carbon emissions; Oil price cycles; Human capital efficiency;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • Q35 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Hydrocarbon Resources
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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