The effect of Foreign direct investment and carbon dioxide on technological Innovations: Worldwide evidence from 180 countries

Abstract

This study examines the effect of carbon dioxide, energy consumption and foreign direct investment on technological innovations in 180 countries of the world from 1980 to 2019.  By employing panel quantile regression, the results indicates that foreign direct investment reduce innovation proxy by patent application residents in the first quantile however this effect is insignificant at the highest quantiles start from 60^th quantile. Carbon dioxide emission significantly increase innovations in all quantiles while the effect of economic growth is positive in first few quantiles that’s increase innovations. The effect of financial development is positive while energy consumption and international trade significantly and negatively affect innovation proxy by patent applications residents. Likewise, the effect of FDI on high technology export is positive across quantiles indicates that its increase technology innovations. The effect of carbon dioxide exerts negative effect on technology in the first few quantiles while it’s become positive at the highest quantiles. Financial development, energy consumption and international trade significantly increase technology while the effect of GDP on technology is positive only in the 70^th quantile. These findings have considerable policy implications for the sample countries regarding economic growth, foreign direct investment inflow, energy consumption and technological innovations.