Organisation For Economic Co-operation And Development Countries Research Articles

Investigating the relationship between women's entrepreneurship and country-level innovation: evidence from a panel of OECD countries

PurposeIn recent years, the topic of women's entrepreneurship has gained increasing attention from researchers and policymakers. Its role in economic growth and development has been widely recognized in several studies. However, the relationship between gender in entrepreneurship and innovation is an underexplored aspect in particular at a country-level perspective. This paper aims to answer the following question: Does female entrepreneurship impact innovation at a national level?Design/methodology/approachUsing a panel dataset of 35 Organization for Economic Co-operation and Development (OECD) member countries over the period 2002–2019, the authors carried out a comprehensive econometric analysis, based on the fixed-effect model, the random-effect model and the feasible generalized least squares estimator, as well as a battery of tests to prevent problems of multicollinearity, heteroscedasticity and autocorrelation of the error terms. In doing so, the authors found consistent and robust results on the linear and nonlinear relationship between women's entrepreneurship and innovation, using selected country indicators from the Global Entrepreneurship Monitor (GEM) consortium, the Worldwide Governance Indicators (WGI) and the World Development Indicators (WDI), including female self-employment, female nascent entrepreneurship and R&D investment and controlling for the same relationships in the case of men's entrepreneurship.FindingsThis study shows that the level of R&D investment, which according to the literature can be considered as a proxy of innovation, is higher when the level of women's entrepreneurship is low. However, exploring more in depth this relationship and the relationship between male entrepreneurship and innovation, the authors found two important and new results. The first one involves the different impact on R&D investment of female self-employment and female nascent entrepreneurship. In particular, female self-employment appears to have a linear negative impact on the R&D, while the impact of female nascent entrepreneurship is statistically nonsignificant. The second one affects the nonlinearity of the negative effect, suggesting that very different challenges are possible at different levels of women's entrepreneurship. In addition, analyzing the role of human capital in the relationship between R&D investment and women entrepreneurship, it emerges that higher education (as the main component of human capital) makes early-stage women's entrepreneurship more technologically consuming, which promotes R&D investment. A higher level of education lessens the significance of the negative relationship between the simplest type of women entrepreneurship (female self-employment) and R&D investment.Originality/valueThe originality of the study is that it provides new evidence regarding the link between women's entrepreneurship and innovation at the macro level, with a specific focus on self-employed women entrepreneurs and early-stage women entrepreneurship. In this sense, to the best of the authors' knowledge, this study is among the few showing a nonlinear relationship between women's entrepreneurship and country-level innovation and a negative impact only in the case of female self-employment. Moreover, this study has relevant implications from a policymaking perspective, in terms of promoting more productive women's entrepreneurship.

Poverty and Social Policy of Aging: Investigating the Determinants of Income Poverty Among Older Adults in the Organization for Economic Co-operation and Development Countries

Objectives: Income poverty is one of the most common problems of old age. It varies among older adults living in different societies. This study aims to investigate the predictors of income poverty in older adults based on the data from Organization for Economic Cooperation and Development (OECD) countries. Methods: The secondary data analysis method was used in the present study. The income poverty rate and its associated variables were extracted from 36 members of OECD countries and entered into the SPSS software, version 22. For data analysis, descriptive and inferential statistics, including the Pearson correlation coefficient test and multiple linear regression analysis were employed. Results: The results showed that in the studied countries, the mean of income poverty among older adults was higher in women (11.48±16.2), and the elderly aged 75 years or above (12.57±16.1). The income poverty of older adults was significantly correlated with older adults’ share in the gross domestic product (r=-0.376, P=024), targeted pension coverage (r=-0.505, P=0.003), income sources based on public transfers (r=-0.460, P=0.005), income sources from work (r=0.697, P=0.000), mandatory pension contribution rate (r=-0.343, P=0.040), and net pension replacement rate (r=-0.424, P=0.010). The results of regression analysis also revealed that variables of income sources from work and targeted pension coverage explained 66% of the variance in income poverty among older adults. Discussion: It is important to pay attention to the variables of age and gender of older people to overcome economic vulnerability in social policies. It is also necessary to consider the role of the share of public transfers and basic old-age pensions to reduce older adults’ poverty. The lessons to be learned from OECD countries in this research are useful for the social rehabilitation of older adults in Iran.

Higher education by fields and foreign direct investments: insights from OECD countries

PurposeThis paper investigates the two-way relationship between foreign direct investment (FDI) inflows and higher education across 36 Organisation for Economic Co-operation and Development (OECD) countries for 1998–2019 periods. To demonstrate this relationship, the authors take into account the total number of graduates as well as the number of graduates from different fields. Accordingly, the authors gathered graduates in four groups which are education, social sciences, technical sciences (tech) and health. In addition to investigating two-way relationship between FDI and graduates, the authors also examined the contribution of primary and secondary level education to FDI.Design/methodology/approachThe authors use two models to investigate the bidirectional relationship between FDI inflows and graduates from four fields. In the first model, the dependent variable is FDI inflows, and in the second model, graduates from each field are the dependent variable. To investigate the dual relationship, the authors employ ordinary least squares (OLS) and two-step system generalized method of moments (GMM) developed by Arellano Bover (1995) and Blundell Bond (1998).FindingsFor the first model, the results show that secondary level and higher education have a positive impact on FDI. In terms of graduates by fields, it is seen that education and health graduates contributed the most to FDI. For the second model in which the authors analysed the effect of FDI on total graduates and graduates from different fields, the authors find that FDI positively affects the number of graduates from all fields, and the strongest effect is on graduates from the social science field.Practical implicationsBased on the results, the authors can say that well-educated people promote FDI inflows to OECD countries, and FDI is also a driving force in raising highly educated people. So, the authors think that the results will help design higher education policies in accordance with FDI and higher education connection.Originality/valueTo the best of the authors’ knowledge, this paper is the first to examine the impact of FDI inflows on graduates by fields and also to investigate the impact of graduates by fields on FDI.

Estimation of the size of the COVID-19 pandemic using the epidemiological wavelength model: results from OECD countries

ObjectivesThis study aimed to simplify the previously developed epidemiological wavelength model and to expand the scope of the model with additional variables to estimate the magnitude of the COVID-19 pandemic. The applicability of the extended wavelength model was tested in Organisation for Economic Cooperation and Development (OECD) member countries. Study designThe epidemiological wavelengths of OECD member countries for the years 2020, 2021 and 2022 were estimated comparatively, considering the cumulative number of COVID-19 cases. MethodsThe size of the COVID-19 pandemic was estimated using the wavelength model. The scope of the wavelength model was expanded to include additional variables. The extended estimation model was improved by adding population density and human development index variables, in addition to the number of COVID-19 cases and number of days since the first case reported from the previous estimation model. ResultsAccording to the findings obtained from the wavelength model, the country with the highest epidemiological wavelength for the years 2020, 2021 and 2022 was the United States (We = 29.96, We = 28.63 and We = 28.86, respectively), and the country with the lowest wavelength was Australia (We = 10.50, We = 13.14 and We = 18.44, respectively). The average wavelength score of OECD member countries was highest in 2022 (We = 24.32) and lowest in 2020 (We = 22.84). The differences in the periodic wavelengths of OECD countries were analysed with the dependent t-test for paired samples in two periods, 2020–2021 and 2021–2022. There was a statistically significant difference between wavelengths in the 2020–2021 and 2021–2022 groups (t(36) = −3.670; P < 0.001). ConclusionsDecision-makers can use the extended wavelength model to easily follow the progress of the epidemic and to make quicker and more reliable decisions.

Total Hip Arthroplasty in Chile Is Characterized By Low Utilization Rates and Disparity in Access.

Background: Disparity in access to total hip arthroplasty (THA) is an internationally recognized phenomenon influenced by social and geographical factors. The Organisation for Economic Co-operation and Development (OECD) employs the utilization rates of THA to evaluate and compare healthcare utilization by its 37 country members, including Chile. Purpose: We sought to describe THA utilization rates in the elderly Chilean population and to compare it with data from other OECD countries. In addition, we sought to identify whether sociodemographic variables influence access to THA in Chile. Methods: We conducted a retrospective review of THA cases performed in Chile between 2016 and 2018 in patients aged 65 years and older in a large database regulated by the Ministry of Health; 8970 patients were included. Mean utilization rates (MURs) of THA within Chile's 346 administrative-territorial divisions (called communes) were calculated. We analyzed associations between the communal MUR and poverty, rurality, insurance type, and geographical health administration dependency. Results: The national MUR of THA in the elderly population in Chile was 144/100,000 for the period studied. The median communal MUR was 107 (interquartile range [IQR]: 66-153). A lower MUR of THA was observed in communes with higher poverty levels, higher rurality, and a lower rates of private insurance. After negative binomial regression analysis, only rurality rate and geographical healthcare service dependency were associated with MUR. Conclusions: This retrospective database study suggests that the utilization of THA in Chile is unequal and well below the average of other OECD countries. Higher rates of rurality and administrative healthcare dependence (a geographical/administrative factor) were associated with disparities in access to THA within Chile.

The relationship between interest rate volatility and the shadow economy in OECD countries: An asymmetric analysis

AbstractInterest rate changes by central banks are a strong monetary policy tool that has a significant impact on the performance of the real economy via various channels. Despite extensive theoretical and empirical studies in this area, the current literature lacks a comprehensive assessment of the relationship between interest rate volatility and the shadow economy. This study explores the link between interest rate volatility and the shadow economy for 38 Organisation for Economic Co‐operation and Development (OECD) member countries over the period 1991–2021 using both linear and non‐linear ARDL models. The use of the non‐linear ARDL specification will allow for the possibility of an asymmetric effect of interest rate volatility on the shadow economy. In addition to the examination of the potential asymmetric effects, we also discuss the ramifications for policymakers with respect to monetary and financial policies while considering each country's specific economic structure.

Exploring economic and environmental efficiency in renewable energy utilization: a case study in the Organization for Economic Cooperation and Development countries.

The share of renewable energy has grown significantly in global energy supply, yet the evaluation of renewable energy utilization has remained limited. Hence, this research explored economic and environmental efficiency in renewable energy utilization in 20 OECD (The Organization for Economic Cooperation and Development) countries from 2015 to 2020. The study approached the data envelopment analysis-slack-based measure (DEA-SBM) to evaluate economic efficiency, and the DEA undesirable output to measure environmental efficiency. Four inputs as labor force, gross capital formation, total renewable energy capacity, and share of renewable energy were compared to two desirable outputs as the gross domestic product (GDP), and total energy production in the economic efficiency model. In the environmental efficiency model, the same inputs were evaluated with GDP as the desirable output and CO2 emissions as the undesirable output. The DEA-SBM revealed that Australia, Belgium, Norway, the UK, and the USA were efficient in economic evaluation, whereas DEA undesirable output indicated that Belgium, France, Sweden, the UK, and the USA were efficient in environmental evaluation. The governments are suggested to adjust the resources management since the number of efficient units decreased in the economic assessment while fluctuating in the environmental assessment.

Will environmental taxes help to mitigate climate change? A comparative study based on OECD countries

Climate change and the resulting extreme weather events bring significant economic losses and many unstable factors. It is an important means to actively seek environmental protection and climate governance countermeasures to meet severe challenges. As an environmental protection tool widely used by the Organization for Economic Cooperation and Development (OECD), environmental taxes are expected to play an important role in combating climate change and reducing extreme weather events. Based on public goods theory, collective cooperation theory, externality theory and double dividend theory of environmental taxes, this paper takes 36 OECD countries as research samples and empirically tests the role of environmental taxes in mitigating climate change process and reducing extreme weather events through the establishment of panel Auto-Regressive Distributed Lag (ARDL) model. The empirical results show that the environmental taxes on the whole is conducive to reducing the frequency of abnormal temperature weather and plays a positive role in reducing carbon dioxide emissions in OECD countries. Further research shows that environmental budget and environmental technologies play a positive role in the process of environmental taxes to delay climate change and reduce extreme weather events. In other words, we should attach importance to the investment of environmental protection funds and the research and development of environmental protection technology while carrying out environmental taxes. The robustness test shows that the main regression results of this paper have strong robustness. The research in this paper enriches theories and existing literature related to environmental taxes and climate change, and provides new research ideas and policy guidance for delaying the process of climate change and responding to extreme weather events.

Green bonds markets and renewable energy development: Policy integration for achieving carbon neutrality

Considering the importance of developing renewable energy consumption to reduce the threat of climate change, this study attempts to evaluate the impacts of green bonds and the development of wind, hydro, and solar energy in a sample of 15 member economies of the Organisation for Economic Co-operation and Development (OECD). It employs the fully modified OLS (FMOLS) technique based on data from 2010 to 2020. The estimations show that issued green bonds increase wind and hydro-energy consumption in OECD countries. At the same time, green bonds do not significantly impact solar energy deployment in these economies. The central practical integrated policies recommended by this study include developing a digital green bond market, establishing a green bond issuance network (GBIN), implementing an international carbon tax policy, and planning to achieve green economic recovery through the green bond market development.

Introducing a new measure of energy transition: Green quality of energy mix and its impact on CO2 emissions

This paper introduces a novel measure of the energy transition, i.e., the green quality of energy mix (GREENQ) across the Organisation for Economic Co-operation and Development (OECD) countries. Then, the paper examines the impact of the GREENQ on CO2 emissions in the panel dataset of 36 OECD countries from 1970 to 2021. The explanatory variables include per capita income, institutional quality and technology. Long-run panel data estimations indicate that per capita income, institutional quality and technology increase CO2 emissions. The novel evidence is that the GREENQ is negatively related to the level of CO2 emissions. These findings are robust to employ different panel data estimation techniques. Potential policy implications are also discussed.

Does being stricter mean doing better? Different effects of environmental policy stringency on quality of life, green innovation, and international cooperation

Nowadays, when we are facing several strict regulations, the question arises - does higher strictness lead to the desired results? This study addresses the fact that less research attention has focused on the effects of environmental policy stringency (EPS) on perceived health expressing quality of life, and on green international cooperation. In addition, previous research has provided rather mixed results on the impact of EPS on green innovation. Therefore, we fill an interesting research gap and help better understand the relationship between market-based and non-market-based EPS, perceived health, green innovations, and green international cooperation in OECD (Organization for Economic Co-operation and Development) countries. Using three complementary databases provided by OECD, Eurostat, and the World Bank and the classical linear regression model, we confirm hypotheses that strong market-based EPS and green international cooperation have positive effects on perceived health. Surprisingly, contrary to the findings of prior research, we do not confirm the positive effects of market-based and non-market-based EPS on green international cooperation. This study contributes to the literature on the Porter hypothesis, technological collaborations in green technological development, and environmental innovation theory. In addition, this study provides several practical implications for policymakers across OECD countries.

Estimating GDP growth using VIIRS night-time light data

ABSTRACT The accuracy of GDP per capita growth rate in countries with low statistical capacity has been questioned, which hinders understanding progress of Sustainable Development Goals (SDGs) accurately. This study aims to estimate GDP per capita growth rate in countries with poor statistical quality. To achieve this goal, the study builds an econometric model with processed Visible Infrared Imaging Radiometer (VIIRS) night-time light data and other economic variables and the study further assesses the accuracy of the model by comparing the estimated GDP growth to high-quality economic data from Organization for Economic Co-operation and Development (OECD) countries between 2014 and 2018. First, due to the abnormal fluctuations in the time series generated from yearly composite night-time light images, we propose a trend analysis method for the monthly night-time light data to synthesize a more stable yearly time series. Then, we construct artificially low-quality GDP simulations and combine VIIRS data and official statistics data to construct regression models to correct the simulated GDP. Finally, to assess the model accuracy, we compare its estimates of GDP per capita growth rates to official data from high-quality OECD countries, looking for any deviations. We have two major findings as follows: first, the VIIRS data, which comprise information on human activity, are a valuable resource for estimating GDP growth; second, the GDP estimation model can reduce the artificial bias of the simulated GDP per capita growth rate by using VIIRS night-time light data and the average accuracy of the model with simulated data can reach 89%.

The impact of geopolitical risks on renewable energy demand in OECD countries

This paper examines the effects of geopolitical risks on renewable energy demand in 20 Organization for Economic Co-operation and Development (OECD) member countries from 1970 to 2019. The renewable energy demand function includes carbon dioxide (CO2) emissions, economic globalisation, natural resources rents, and per capita income as control variables. It is found that geopolitical risks reduce the demand for renewable energy and threaten climate change mitigation policies. Degrading the environment in terms of rising CO2 emissions is detrimental to the renewable energy demand. Natural resource rents also decrease renewable energy consumption. However, higher per capita income and economic globalisation significantly increase renewable energy consumption. These findings bear crucial policy implications for the Russia-Ukraine War era, suggesting that geopolitical risks discourage renewable energy demand. Therefore, policymakers in the OECD countries should focus on geopolitical harmony among economic agents, groups, and regions.

How do financial development and environmental policy stringency affect renewable energy innovation? The Porter Hypothesis and beyond

Multiple studies have examined the effects of financial development on renewable energy consumption, but little is known about its impact on renewable energy innovation. The validity of the Porter Hypothesis (PH) in renewable energy industries—that is, whether stricter environmental policies promote innovation—remains unclear. This study explores the effects of financial market development and environmental policy stringency on renewable energy innovation, as well as whether renewable innovation differs with levels of stringency of environmental policy and levels of development of the financial market. We apply a nonlinear panel threshold model to the 37 member countries of the organization for Economic Co-operation and Development (OECD) from 1990 to 2019. The results show that as financial development increases, its impact gradually declines, and that as environmental policy becomes more stringent, its impact rapidly increases. This finding implies that financial development is associated with greater increases in renewable innovation in countries with a medium level of financial development, and that stricter environmental policies can be used by OECD countries to increase innovation. This study therefore confirms the validity of the PH as well as the financial development effect on renewable innovation in OECD countries. It also finds that international oil prices and the level of research and development expenditure have significantly positive effects on renewable innovation. Policy suggestions for developing financial markets and increasing policy stringency are proposed.

The financial access, ICT trade balance and dark and bright sides of digitalization nexus in OECD countries

The information and communication technology (ICT) of trade balance is one of the main facilitators of any business sustainability. As ICT and financial inclusion eases access to knowledge and enhances significantly developing several human skills and competencies, its impact in industrial sectors has mainly recognized as positive. But digitalization as well arguable comes with some other challenges, while disruptive digital innovations exerted on different industries and economies. In this spirit, this study aims to measure the impact of financial access and the information and communication technology (ICT) trade balance on the dark and bright sides of digitalization. Data has been collected from 31 countries of Organisation for Economic Co-operation and Development (OECD) for the period of 2008–2019. Technological growth, technological innovation, technological performance risk and ethical proxies were used to examine the dark and bright sides of digitalization. The main findings were consistent and confirmed by the estimated panel least squares, fixed and random effects, feasible generalized least squares and system generalized method of moments (S-GMM) estimators. Financial access has found to have a significant negative impact on the digitalization proxies reflecting the dark side of digitalization in all estimators. Whereas, the ICT trade balance has found to have a significant positive impact on digitalization proxies reflecting the bright side of digitalization in most estimators. These results contribute to the policy debate on the importance of digital finance models and ICT exports awareness when promoting the bright side of digitalization. Furthermore, policy makers should monitor and update information that is disclosed digitally as the results of this study extended support the creative destruction theory which implicitly included economic innovation and the business cycle theories.

Food insecurity indicators of 14 OECD countries in a health economics aspect: A comparative analysis.

Food insecurity is a critical issue that refers to a lack of access to adequate food to support a healthy and active lifestyle. This problem has wide-reaching effects and can negatively impact health, education, and overall well-being. Addressing food insecurity requires a multifaceted approach that involves the efforts of governments, organizations, and individuals to ensure access to a balanced and nutritious diet for all. The aim of this study is to shed light on macro-level models and evaluate food insecurity risk in international comparisons. We considered six criteria to evaluate food insecurity risk in terms of health expenditure, gross domestic product (GDP) per capita, and GDP growth rate among 14 Organisation for Economic Co-operation and Development (OECD) countries. We developed a modeling approach in three stages to compare food insecurity risk and discussed the reasons for the rankings of the countries based on the model results. According to our findings, the United States has the lowest food insecurity risk, while Colombia has the highest. The results suggest that economic factors, such as GDP per capita and GDP growth rate, play a significant role in food insecurity risk. The study highlights the importance of addressing economic disparities and promoting economic growth to reduce food insecurity. This study provides insights into the relationship between food insecurity and economic factors, indicating that addressing economic disparities and promoting economic growth can reduce food insecurity. Future research using similar models to link economic outcomes with important health components such as nutrition and physical activity could provide a foundation for policy development.

Investigating environmental policy stringency in OECD countries: implications for the Arab world

PurposeAs the world began to witness an unprecedented rate of environmental destruction, economists and international institutions have been toiling away for decades, making every effort to dissect the dynamics of the relationship between the environment and the economy. Many claims have preached that there is a trade-off between environmental wellbeing and economic prosperity, where economic growth would be hindered by environmental protection. As we continue to neglect nature, will the world be capable of maintaining infinitely growing economies without falling into a deficit of natural resources? The foundation of all forms of economic growth springs from nature. Therefore, this study aims to explore the true impact of environmental protection policies on economic performance, and claims that well-designated environmental policies would only strengthen economies.Design/methodology/approachThis study aims to investigate the impact of environmental protection policies on gross domestic product (GDP) growth utilizing a selected sample of 18 OECD countries. Fixed effects panel regression was conducted for the sample from 1998 to 2015.FindingsFindings suggest that an increase in the environmental protection stringency is associated with an increase in GDP in the long-run. Whereas in the short run, more stringent environmental policies have been shown to have a questionable impact on GDP, brought to light by the mixed results portrayed in the short-run data.Research limitations/implicationsWhile it is true that this study has utilized data from the The Organisation for Economic Co-operation and Development (OECD), the findings could be applicable to countries of the MENA region. This is due to the fact that GDP levels of OECD countries and Middle East and North African (MENA) countries have been converging over the past few decades. The convergence suggests that both regions seem to be following similar trends since the year 1990, with an increasing similarity in trend over the years.Originality/valueThis paper empirically proves that the protection of nature is necessary for the sustenance of long-term economic growth. This study also provides an approximate time range of when the economic gains of environmental protection would be realized, specifically in the beginning of a green growth transition. This makes the study findings accurately relevant to Arab countries, where providing a time range is necessary to alleviate some the uncertainty of policymakers in the MENA region towards environmental policies.

Identifying typologies of synthetic energy justice: Eco-centric and anthropocentric perspectives

Since the concept of energy justice emerged, studies have conceptually, but rarely empirically, explored energy justice. In addition, studies on energy justice have mainly focused on anthropocentric values toward energy justice. This study aims to categorize Organization for Economic Cooperation and Development (OECD) countries’ energy justice using synthetic energy justice via two aspects: eco-centrism and anthropocentrism. Each aspect of energy justice is sub-divided into distributive, substantive, and procedural justices. Using a fuzzy set qualitative comparative analysis methodology via a statistical program, we suggest typologies of 35 OECD countries for each aspect. Eight types of energy justice for each aspect are extracted, and four types of synthetic energy justice groups are identified among OECD countries. Austria, Iceland, and Luxembourg show the best performance in synthetic energy justice, but do not reach a complete contestable status from an eco-centric perspective. This study provides practical policy implications for OECD countries to self-evaluate each country's macroscopic policy direction in the energy sector, and to ultimately pursue synthetic energy justice with a balanced perspective for our environment and us.

The Impact of Optimizing Industrial Energy Efficiency on Agricultural Development in OECD Countries

This study evaluates the impact of industrial energy efficiency on agricultural development in the 31 member countries of the Organization for Economic Cooperation and Development (OECD) from 2015 to 2019. Using dynamic network slack-based measures (DN-SBM) and dynamic network total factor productivity (DN-TFP) indicators, dynamic cross-period information is used to assess the changes in efficiency and productivity of the industrial and agricultural sectors. The empirical results show that the industrial sector of the OECD is more efficient than the agricultural sector, and while some countries have low efficiency, productivity tends to improve. The study has three contributions: 1. Using the concept of the water–energy–food (WEF) nexus as a framework and combining its elements with variables to evaluate the efficiency performance of OECD countries; 2. using a dynamic two-stage DN-SBM model to objectively assess the overall efficiency value and provide improvement suggestions for different stages; 3. a comprehensive analysis of efficiency and productivity; the results can serve as a reference for OECD countries when formulating policies

Is Relationship between Carbon Emissions and Innovation Nonlinear? Evidence from OECD countries

Our paper fills a gap in the literature on the relationship between innovation, carbon emissions, ownership structure, and institutional framework quality. We test the linear and nonlinear relationships between research and development (R&D) expenditures and carbon emissions by considering ownership structure types and institutional setting variables. We use parametric and semiparametric regressions, on a sample of 32 member countries of the Organization for Economic Cooperation and Development (OECD), over the period 2015–2020. Our parametric results confirm the inverted U-shaped relationship found in previous research, between innovation and carbon emissions, as well as the significantly positive effect of an institutional presence in ensuring an energy transition. Moreover, semiparametric regressions suggest, first, that there are many peaks, which confirms the dual relationship between the variables. Second, they highlight a positive association between foreign investors and carbon emissions. Third, the introduction of the institutional quality variable confirms an inverted u-shaped relationship between carbon emissions and innovation. Globally, our study raises awareness among both public authorities and investors of the challenges of environmental degradation and its adverse effects on the climate.