The nexus between energy consumption, carbon dioxide emission and technological innovation in the Global panel: Evidence from Panel quantile regression

Abstract

Expanding the capability of technological innovations is curial in acquiring renewable energy sources, enhancing the efficiency of energy and lowering carbon dioxide emissions which can leads to environmental sustainability however the factors effecting the level of technological innovations needs to be explored. Consequently, this study explores the effect of carbon dioxide emission, energy consumption and foreign direct investment on technological innovations in 179 global countries from 1980 to 2019.  The results indicate that foreign direct investment significantly and negatively affect technological innovations proxy by patent nonresidents in the lower quantiles while this effect is negative insignificant at the highest. Carbon dioxide emission and financial development significantly and positively effect technological innovations proxy by patent nonresidents while energy consumption and trade significantly decrease technological innovations. In case of dependent variable research and development, the effect of foreign direct investment on technological innovations and international trade is negative while financial development and energy consumption positively and significantly affect technological innovations proxy by research and development. The effect of financial development is negative significant and negative insignificant across quantile while the highest quantile gives positive coefficient thus shows that its increase technological innovations proxy by research and development. The findings have considerable policy implications for the sample countries regarding economic growth, foreign direct investment inflow, energy consumption and technological innovations.