7. Human Capital, Green Energy, and Technological Innovations: Firm-Level Analysis

The study had three overarching objectives. The first aim of the study was to comprehensively review the role that a firm’s human capital played in promoting energy efficiency and green energy. Second aim was to review the role of technological innovation in the relationship between a firm’s human capital and energy consumption (green and non-green). Third aim was to provide any empirical evidence on the relationship between human capital and energy consumption keeping technological innovation as moderator. After reviewing the literature, we developed two equations to examine the quadratic relationship between HC and energy consumption by taking technological innovation as a moderating variable. Pakistan’s manufacturing sector was taken as a case, and data from 635 manufacturing firms were used for analysis. The study employed the panel feasible generalized square approach for the analysis. The results confirmed the existence of EKC-type inverted U-shape relationship between HC and non-green energy and an inverted U-shape curve in the relationship of HC and green energy consumption. Our results concurred broadly with the other studies conducted on the HC-energy consumption dyad. Our findings imply that industries with a higher level of HC and technology innovation can quickly substitute non-green energy with green energy consumption.