1 © 2019 AESS Publications. All Rights Reserved. THE IMPACT OF TRADE, TECHNOLOGY AND GROWTH ON ENVIRONMENTAL DETERIORATION OF CHINA AND INDIA Hongzhong Fan 1 Md Ismail Hossain 2+ Mollah Aminul Islam 3 Yassin Elshain Yahia 4 1 Professor, School of Economics, Huazhong University of Science and Technology, 1037, Luoyu Road, Wuhan - 430074, Hubei, P. R. China 2,3,4 Research Scholar (PhD Program), School of Economics, Huazhong University of Science and Technology, 1037, Luoyu Road, Wuhan - 430074, Hubei, P. R. China (+ Corresponding author) ABSTRACT Article History Received: 20 September 2018 Revised: 23 October 2018 Accepted: 27 November 2018 Published: 18 December 2018 Keywords Environment Technological innovation Trade openness Economic growth ARDL Toda-Yamamoto Granger causality China and India. JEL Classification: O11, O57, Q55, Q56. The aim of this study is to investigate the impact of Trade openness, Technological Innovation, and Economic growth on the Environmental deterioration of China and India over the period of 1974–2016. These two largest transitional and emerging countries of Asia have gained miraculous development in many sectors but at the cost of Environmental deterioration. We have applied the ARDL Bounds Test methodology and Toda- Yamamoto Granger Non-Causality test to determine the short-run and long-run relationships of the variables. The results of the study illustrate that Technological innovation has a significant positive impact and Economic growth has a strong 0adverse effect on the Environmental deterioration of China in the long-run. But it is not so strong in the short-run. In the case of India, Trade openness and Economic growth have a significant positive impact and Technological innovation has a strong negative effect on Environmental deterioration in the long-run. The selected macro-economic explanatory variables have a significant impact on the Environmental deterioration of India in the short-run as well. The results of ARDL bounds test are also supported by Toda- Yamamoto Granger Non-Causality test. To compare China and India, Trade openness has a significant impact on the Environmental deterioration of India, but it is not factual for China. In addition, Technological innovation and Economic growth have an inverse relationship on the Environmental deterioration of both the Countries. The findings of this study have an important policy implication for China and India. Contribution/ Originality: The contributions of this study in the existing literature are: it has examined the impact of Trade, Technology, and growth on the Environmental deterioration of the two largest transitional and emerging economies of Asia: China and India. We have applied the ARDL Bounds method and Toda-Yamamoto Granger Non-Causality test and illustrated that Trade has a significant impact on the Environmental deterioration of India, but it is not factual for China. Technology and growth have an inverse relationship on the Environmental deterioration of both the Countries. Asian Economic and Financial Review ISSN(e): 2222-6737 ISSN(p): 2305-2147 DOI: 10.18488/journal.aefr.2019.91.1.29 Vol. 9, No. 1, 1-29 © 2019 AESS Publications. All Rights Reserved. URL: www.aessweb.com