Nexus between environment regulation, FDI, and green technology innovation in OECD countries

To achieve the goal of "sustainable development," a crucial way is promoting green technology innovation. This paper examines the nexus between environment regulation, FDI, and green technology innovation in OECD countries from 1998 to 2018. The study uses a pooled mean group, random effect model, and GMM model to analyze the relationship empirically. A Dumitrescu-Hurlin panel causal test also tests the causal relationship between variables. The result indicates that environment regulation significantly relates to green technology innovation and encourages the economy to adopt green technology innovation. This result further explained FDI exerts a negative effect on green technology innovation. The findings suggest that there is a need to execute a proper effective environmental policy, especially concerning FDI, to gain the spillover effect on promoting green technology in the host country, specifically in OECD countries. This study provides policy implications to effectively formulate environmental regulation and FDI inflow to gain technology spillover to promote green technology.