The impact of political competition on green innovation: A new insight into sustainable development

Abstract

This research examines a panel of 121 economies worldwide over the period 1980–2020 for the impact of political competition on green innovation. We find that an increase in the intensity of political competition has a significantly negative impact on green innovation and that this impact remains significant in the long term, especially for non‐OECD countries and middle (low) income countries, whereas the sub‐indicators of political competition indicate that the level of institutionalization of political participation and the degree of government restrictions on political participation have different impacts on green innovation. The findings also reveal that lower political risk and higher levels of globalization positively moderate the negative impact of political competition on green innovation. The adverse effects of party competition are exacerbated when left‐wing parties are in power. This study offers new insight into sustainable development based on examining the relationship between political competition and green innovation.

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“…Second, the twoway fixed effects model controls for time and area fixed effects; that is, individual characteristics that do not vary over time, and time characteristics that do not vary over area, respectively. This estimation method can greatly reduce the model's endogeneity (Yang et al, 2023;Zhao et al, 2022). Based on these advantages, this paper uses two-way fixed effects model for estimation and defines the benchmark model as follows.…”