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Exploring the external forces driving green environmental innovation: empirical evidence from Asian market

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  • Umar Farooq

    (Xi’an Jiaotong University)

Abstract

Green environmental innovation is a vital pathway toward the development of a green environment and environmental sustainability. There exist various factors that can potentially affect the various strategies permissible for green environmental innovation. Among the others, this study mainly focuses on exploring the role of external forces including foreign official aid, foreign energy aid, remittances, and FDI inflow in driving the green environmental innovation. By utilizing the sample of Asian economies and a wide range of data for the year 2001–2018, the statistical outputs of the system GMM model reveal the positive significant effect of all external forces on green environmental innovation proxied by patent registration, green technological development, and green growth innovation. The inflow of foreign funds in the form of foreign official aid and foreign energy aid can boost technological development by providing financial assistance. Similarly, the receipts of remittances can help the local government to offer subsidies to industrial sector for green environmental innovation. The inflow of FDI can maximize the green environmental innovation in the host country by transfer of knowledge and a modern production system. Communally, it can be asserted that the inflow of foreign funds can enhance green innovation in the host country. In addition, the empirical analysis suggests the dynamic effect of economic growth, environmental taxation, trade volume, and financial development on green technological development. The empirical analysis suggests that government officials should introduce some policy incentives to enhance the inflow of foreign funds to maximize the green innovation and to stimulate the green technology development.

Suggested Citation

  • Umar Farooq, 2023. "Exploring the external forces driving green environmental innovation: empirical evidence from Asian market," Economic Change and Restructuring, Springer, vol. 56(2), pages 981-1006, April.
    • Handle: RePEc:kap:ecopln:v:56:y:2023:i:2:d:10.1007_s10644-022-09463-8
    DOI: 10.1007/s10644-022-09463-8
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    Cited by:

    1. Donis, Silvia & Gómez, Jaime & Salazar, Idana, 2023. "Economic complexity, property rights and the judicial system as drivers of eco-innovations: An analysis of OECD countries," Technovation, Elsevier, vol. 128(C).
    2. Minjie Li & Mengjun Meng & Yihui Chen, 2024. "The impact of the digital economy on green innovation: the moderating role of fiscal decentralization," Economic Change and Restructuring, Springer, vol. 57(2), pages 1-33, April.

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    More about this item

    Keywords

    Foreign official aid; Foreign energy aid; Foreign direct investment; Green environmental innovation; Green technology development; Remittances;
    All these keywords.

    JEL classification:

    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances

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