Global Dynamics of Energy UseSustainability, and R&D: Unlocking Green Innovation Through Environmental Regulations

Abstract

The purpose of this study is to analyze the interdependencies among economic growth, energy consumption, foreign direct investment (FDI), environmental sustainability, and research & development (R&D) in green innovation behavior from 2000-2020 for 49 countries across the globe. The study tests these predictions using the Generalized Method of Moments (GMM) for robust analysis and investigates how financial development mediates these relationships, which is moderated by environmental regulation. They find that FDI, energy consumption, and R&D all have a significant role in driving green innovation. Financial development, in contrast to common intuition and hypothesis, meddles not a lot among monetary growthenergy utilization, FDI, ecosystem sustainability, R&D, green innovation relationship. The remarkable impact of environmental regulations may partially cause a considerable reduction in the relationship between financial development and green innovation. These findings do indicate the importance of policy targeted at continuing to direct and effect green innovation. In summary, the direct effects of FDI and energy consumption as well as R&D are important for policymakers to consider in relation to financial development such that environmental regulations serve a moderating role in ensuring sufficient economic growth while maintaining an acceptable level of sustainable environment