Abstract:This study investigates the role of foreign direct investment (FDI) in environmental innovation in Africa during 1990–2019. It utilizes the endogenous growth theory to specify an innovation production function, estimated using the seemingly unrelated regression (SURE) method. The study employs four indicators of environmental innovation and also controls for the influence of resource abundance. Key findings from the study show evidence that FDI inflow enhances environmental innovation practices by improving re… Show more
“…Further, this outcome is in harmony with the study by Awodumi (2023). He suggested that FDI in uences positive energy intensity, minimizing carbon emissions and enhancing economic growth (Awodumi, 2023) Ultimately, the discoveries demonstrate that FDI moderates the direct relationship between (1) GDP and eco-innovation and (2) ecoinnovation and carbon emissions. As a result, the mediating effect between GDP and carbon emissions differs for MENA countries with varying levels of FDI.…”
Section: Modelsupporting
confidence: 70%
“…As a result, this proves that FDI can signi cantly reinforce the GDP-eco-innovation nexus to reducing carbon emissions. Further, this outcome is in harmony with the study by Awodumi (2023). He suggested that FDI in uences positive energy intensity, minimizing carbon emissions and enhancing economic growth (Awodumi, 2023) Ultimately, the discoveries demonstrate that FDI moderates the direct relationship between (1) GDP and eco-innovation and (2) ecoinnovation and carbon emissions.…”
Economic growth is frequently held responsible for environmental problems. Some believe the relationship between ecological damage and economic growth is more complicated than others. Some even contend that economic growth might help the environment. Therefore, moving toward a greener economy depends heavily on environmental advancements. However, despite increased eco-innovation activities and attracting foreign investments, the ecological situation is not improving. In this respect, re-evaluating the problem from a different perspective is critical. Can the mediation-moderation effect of foreign investment and eco-innovation orientation develop and support economic growth to cure the environment? Therefore, this paper first uses the geographic Durbin model to examine the effects of economic growth on carbon emissions for nine countries in the MENA region for 20 years. Second, the present research investigates the mediation effect of eco-innovation. Third, this article uses the spatial stepwise regression model to explore the moderating function of FDI on the mediation model. The outcomes of this research are that: (i) Economic growth positively impacts carbon emissions. (ii) Eco-innovation mediates the relationship between economic growth and carbon emissions. (iii) FDI has a dual moderating effect on the mediation model. This paper depicts an indispensable move towards grasping the current climate change risk and supporting the sustainability transition. Finally, several policy implications were presented based on this study's research findings.
“…Further, this outcome is in harmony with the study by Awodumi (2023). He suggested that FDI in uences positive energy intensity, minimizing carbon emissions and enhancing economic growth (Awodumi, 2023) Ultimately, the discoveries demonstrate that FDI moderates the direct relationship between (1) GDP and eco-innovation and (2) ecoinnovation and carbon emissions. As a result, the mediating effect between GDP and carbon emissions differs for MENA countries with varying levels of FDI.…”
Section: Modelsupporting
confidence: 70%
“…As a result, this proves that FDI can signi cantly reinforce the GDP-eco-innovation nexus to reducing carbon emissions. Further, this outcome is in harmony with the study by Awodumi (2023). He suggested that FDI in uences positive energy intensity, minimizing carbon emissions and enhancing economic growth (Awodumi, 2023) Ultimately, the discoveries demonstrate that FDI moderates the direct relationship between (1) GDP and eco-innovation and (2) ecoinnovation and carbon emissions.…”
Economic growth is frequently held responsible for environmental problems. Some believe the relationship between ecological damage and economic growth is more complicated than others. Some even contend that economic growth might help the environment. Therefore, moving toward a greener economy depends heavily on environmental advancements. However, despite increased eco-innovation activities and attracting foreign investments, the ecological situation is not improving. In this respect, re-evaluating the problem from a different perspective is critical. Can the mediation-moderation effect of foreign investment and eco-innovation orientation develop and support economic growth to cure the environment? Therefore, this paper first uses the geographic Durbin model to examine the effects of economic growth on carbon emissions for nine countries in the MENA region for 20 years. Second, the present research investigates the mediation effect of eco-innovation. Third, this article uses the spatial stepwise regression model to explore the moderating function of FDI on the mediation model. The outcomes of this research are that: (i) Economic growth positively impacts carbon emissions. (ii) Eco-innovation mediates the relationship between economic growth and carbon emissions. (iii) FDI has a dual moderating effect on the mediation model. This paper depicts an indispensable move towards grasping the current climate change risk and supporting the sustainability transition. Finally, several policy implications were presented based on this study's research findings.
“…Further, this outcome is consistent with the study by Awodumi (2022). He suggested that FDI influences positive energy intensity, minimizing carbon emissions and enhancing economic growth (Awodumi 2023). Huang et al (2022) showed economic growth and regulation systems negatively influence the effects of FDI on carbon emissions (Huang et al 2022).…”
Section: The Dual Mediating Effect Of Fdimentioning
Sustainable development is affected by environmental problems and climate change, which are frequently attributed to economic growth. Greener economies, therefore, rely heavily on technological advancements. Environmental conditions keep deteriorating despite increasing eco-innovations and foreign investments in most developing nations. Consequently, it is crucial to connect these constructs to the sustainable development goals (SDGs) to address climate hazards, reduce poverty, and achieve a sustainable transition while maintaining economic growth. In this paper, we use the geographic Durbin model to examine the effects of economic growth on carbon emissions while connecting the SDGs for nine countries in the Middle East and North African region during the last 20 years. Second, the paper investigates the mediation effect of eco-innovation-related SDGs. Third, this article uses the spatial stepwise regression model to explore the moderating function of FDI-related SDGs on the mediation model. The findings of this paper are that: (i) Economic growth positively impacts carbon emissions that derail the realization of the various SDGs. (ii) Eco-innovation-related SDGs mediate the relationship between economic growth and carbon emissions; (iii) FDI-related SDGs have a dual moderating effect on the mediation model. This research advances our understanding of how the variables mentioned above maximize the efforts geared towards mitigating climate stressors and reducing poverty in pursuit of attaining a desired future.
“…Under this scenario, green innovation is considered in the literature as one of the most important concepts that can help manufacturing companies reduce future difficulties through the development of greener and less polluting manufacturing operations (Zhao et al, 2022;Hu et al, 2023;Silva et al, 2023). Particularly, because only by changing the current production processes and systems and promoting the adoption and implementation of green innovation in all manufacturing companies, it is possible to truly achieve green development in the global economy (Zheng et al, 2023;Awodumi, 2023).…”
Section: Introductionmentioning
confidence: 99%
“…Particularly, because only by changing the current production processes and systems and promoting the adoption and implementation of green innovation in all manufacturing companies, it is possible to truly achieve green development in the global economy (Zheng et al. , 2023; Awodumi, 2023).…”
PurposeGreen innovation and sustainability are two contemporary initiatives that are gaining more and more attention from researchers, academics and industry professionals as they are considered important business strategies to improve environmental conditions and obtain better organizational performance. Besides, the growth of uncontrolled economic activities leads to an imbalance of economic, social and environmental values in different sectors. However, little is known about the mediating role that economic, social and environmental sustainability has in the relationship between green innovation and firm performance. Previous literature has focused on developed economies, but not on a developing economy such as that of Mexico. Therefore, this research aims to fill this existing gap by exploring the mediating effects of sustainability in the relationship between green innovation and firm performance.Design/methodology/approachA theoretical research model that theorizes, through ten hypotheses, the antecedents and consequences of the mediating effect of economic, social and environmental sustainability and the occurrence between green innovation and firm performance is proposed. The model is tested through PLS-SEM using data that were collected using a questionnaire survey that was distributed among companies in the automotive industry in Mexico. In total, a sample of 460 responses was obtained.FindingsThe results suggest that green innovation has significant positive effects on economic and environmental sustainability, as well as on firm performance, but not on social sustainability. The results also indicate that the relationship between green innovation and firm performance improves considerably with the mediation of economic, social and environmental sustainability.Research limitations/implicationsDespite the present study focused on an industrial sector that is commonly at the forefront of technological development, it was limited to a specific region of Mexico. Thus, its results must be taken with caution as more extensive results including other regions and nations will be required to further validate the results obtained from the present study.Practical implicationsThe findings of this study have important implications for both policymakers and managers of manufacturing firms in the automotive industry as they can be used as a basis to formulate better strategies and policies to enhance the capabilities of companies to develop innovations that could reduce environmental risks and other consequences of climate change.Originality/valueThe present study adds to the innovation and sustainability body of knowledge by analyzing and discussing the mediating role of sustainability in the relationship between green innovation and firm performance. It also generates new knowledge about the mediating effect that sustainability has on the relationship between green innovation and firm performance, particularly in the context of a developing economy such as that of Mexico.
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