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Non-Linear Effects of Economic Policy Uncertainty on Green Innovation: Evidence from BRICS Countries

Author

Listed:
  • Umar Farooq

    (School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710049, China)

  • Mohammad Mahtab Alam

    (Department of Basic Medical Sciences, College of Applied Medical Science, King Khalid University, Abha 61421, Saudi Arabia)

  • Bilal Haider Subhani

    (School of Economics and Management, Xidian University, Xi’an 710049, China)

  • Mosab I. Tabash

    (Department of Business Administration, College of Business, Al Ain University, Al Ain P.O. Box 64141, United Arab Emirates)

  • Zilola Shamansurova

    (Department of Finance and Financial Technologies, Tashkent State University of Economics, Tashkent 100066, Uzbekistan)

Abstract

This research investigates the influence of economic policy uncertainty (EPU) and its squared term (squared EPU) on the advancement of environmental technologies and the registration of environmental patents in the BRICS nations over the period from 2010 to 2022. Employing the cross-section autoregressive distributed lag (CS-ARDL) technique, the analysis reveals a significant negative relationship liaison between EPU and both environmental innovation and patent registrations, indicating that an increased uncertainty discourages investment in sustainable technologies. Conversely, a positive relationship was found with square EPU, suggesting that elevated levels of uncertainty may stimulate innovative responses as firms seek to differentiate themselves in a competitive market. These findings underscore the necessity for stable and transparent policy frameworks to foster long-term commitments to environmental innovation. This research enriches the literature by illustrating the dual nature of EPU and its differentiated effects on eco-innovation.

Suggested Citation

  • Umar Farooq & Mohammad Mahtab Alam & Bilal Haider Subhani & Mosab I. Tabash & Zilola Shamansurova, 2024. "Non-Linear Effects of Economic Policy Uncertainty on Green Innovation: Evidence from BRICS Countries," Sustainability, MDPI, vol. 16(21), pages 1-21, November.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:21:p:9529-:d:1512362
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    References listed on IDEAS

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