DO ENVIRONMENTAL AND ECONOMIC FACTORS MATTER FOR INNOVATION? EVIDENCE FROM OIL-IMPORTING AND OIL-EXPORTING COUNTRIES

Abstract

The purpose of this paper is to investigate the effect of gross domestic product per capita, trade openness, renewable energy, energy consumption, foreign direct investment, carbon emission, and oil prices on innovation for selected 11 oil-importing and 11 oil-exporting countries and to compare the results from both country groups to see the differences and similarities. For this purpose, we employ Poisson regression and negative binomial fixed effect techniques from 1990 to 2018. The empirical findings illustrate that all variables are significant except for renewable energy in oil-exporting countries. Trade openness and carbon emission have a significant and negative relationship with innovation, while gross domestic product per capita, energy consumption, foreign direct investment, and oil price have a significant and positive relationship with innovation in oil-exporting countries. Gross domestic product per capita, energy consumption, and carbon emission have a significant and positive relationship with innovation in oil-importing countries, while there is a significant and negative relationship between renewable energy and innovation.